Dollar sinks for third week in a row

New York (Feb 14)  The ICE U.S. Dollar Index finished lower for the third week in a row Friday as a mixture of weak U.S. data and signs of growth in the eurozone threatened the buck’s seven-month rally.

Recent weakness in U.S. data contrasted with stronger-than-expected growth in the eurozone economy, and improved growth forecasts from the Bank of England, to weigh on the dollar this week. January retail-sales figures also slumped for the second month, and the Labor Department reported a surprisingly high uptick in weekly jobless claims Thursday.

Also on Thursday, reports of a cease-fire agreement in Ukraine and an extension of Greece’s borrowing limit under the ECB’s emergency liquidity assistance program helped boost the euro Thursday.

The dollar index DXY, +0.00% which measures the dollar’s strength against a trade-weighted basket of six rival currencies, was up 0.1% Friday to 94.1910, but finished the week 0.5% lower. The euro comprises nearly 60% of the index’s value.

“The recent moves in FX markets have caught many people off guard,” wrote Angus Campbell, senior analyst at FxPro. “Perhaps not to the extent of the [Swiss National Bank] floor removal a month ago, but the dollar strength of last year and the first part of January has come to a grinding halt.”

Source:  MarketWatch