The dollar ended Friday’s session slightly lower against the yen as a weaker-than-expected reading on U.S. consumer sentiment offset a report showing that U.S. home construction rose strongly in April.
The Commerce Department reported Friday that U.S. housing starts rose 13.2% last month, after a 2.0% increase in March. It was the largest increase in five months, indicating that the economy is shaking off the effect of a weather related slowdown over the winter.USD/JPY settled at 101.52, down 0.05% for the day, not far from the two-month trough of 101.30 reached in the previous session. For the week, the pair was down 0.66%.
The upbeat housing data was overshadowed by a report showing that consumer confidence in the U.S. deteriorated this month. The University of Michigan's consumer sentiment index dropped to 81.8, from 84.1 the month before. Analysts had expected a slight uptick to 84.5.
The euro was lower against the dollar, with EUR/USD settling at 1.3693, holding just above the two-and-a-half month low of 1.3647 reached on Thursday. For the week, the pair was down 0.45%.
The single currency remained under pressure after weaker-than-expected data on euro zone first quarter growth on Thursday added to pressure on the European Central Bank to ease monetary policy at its next meeting in June, in order to safeguard the recovery in the region.
The euro zone’s gross domestic product grew just 0.2% in the first quarter, compared to expectations for growth of 0.4% and expanded by a smaller than expected 0.9% from a year earlier.
EUR/JPY ended Friday’s session at 139.03, down 0.17% for the day, after falling to lows of 138.78 earlier in the session, the weakest since February 12.
Elsewhere, sterling pushed higher against the dollar on Friday, withGBP/USD up 0.14% to 1.6812 at the close. For the week, the pair lost 0.35%.
Sterling weakened across the board on Wednesday after the Bank of England indicated that it is in no rush to hike interest rates, saying the economic recovery was still at an early stage.
In the week ahead, investors will be looking to the minutes from the Federal Reserve's latest monetary policy meeting, due for release on Wednesday, for insight on the central bank's view of the economy.
The euro zone is to publish what will be closely watched data on private sector activity, while the U.K. is to release data on consumer prices.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 19
New Zealand is to publish data on producer price inflation. Japan is to release a report on core machinery orders.
Germany’s Bundesbank President Jens Weidmann is to speak at an event in Frankfurt; his comment will be closely watched. Later in the day the German central bank is to publish its monthly report.
Markets in Canada are to remain closed for a national holiday.
Tuesday 20
The Reserve Bank of Australia is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
In the euro zone, Germany is to release data on producer price inflation.
The U.K. is to release data on consumer price inflation, which accounts for the majority of overall inflation.
Canada is to publish data on wholesale sales.
In the U.S., Federal Reserve Bank of Philadelphia Charles Plosser and Federal Reserve Bank of New York President William Dudley are to speak.
Wednesday, May 21
The Bank of Japan is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision. The announcement is to be followed by a press conference.
Japan is also to publish data on the trade balance, the difference in value between imports and exports.
Australia is to publish data on the wage price index and a private sector report on consumer sentiment.
The euro zone is to release data on the current account.
The U.K. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Meanwhile, the Bank of England is to publish the minutes of its May meeting.
Fed Chair Janet Yellen is to speak at an event in New York.
Later Wednesday, the Fed is to publish the minutes of its May meeting.
Thursday, May 22
China is to publish the preliminary reading of the HSCB manufacturing index.
New Zealand and Australia are to produce data on inflation expectations.
The euro zone is to release data on manufacturing and service sector activity, while Germany and France are to release individual reports.
The U.K. is to publish revised data on first quarter economic growth, as well as reports on business investment and public sector borrowing. The U.K. is also to produce private sector data on industrial order expectations.
Canada is to release data on retail sales.
The U.S. is to release its weekly report on initial jobless claims and private sector data on existing home sales.
Friday, May 23
In the euro zone, the Ifo Institute is to publish data on German business climate.
Canada is to publish data on consumer price inflation.
The U.S. is to round up the week with data on new homes sales.
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