Dollar rally stymied by consumer data

The dollar was mixed against major currencies Friday after a consumer sentiment reading fell to its lowest level in more than 25 years.

The pound rose to $1.9826 in late New York trading from $1.9755, while the Japanese currency was unchanged at ¥105.26.

The euro slid to $1.5635, down from $1.5686 Thursday. The 15-nation currency has slid since it reached the latest in a string of records on Tuesday, breaking through the $1.60 mark for the first time and rising as high as $1.6018.

On Thursday, the euro lost more than two cents after a downbeat German business confidence survey and an unexpected drop in American claims for jobless benefits.
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The Reuters/University of Michigan released its consumer sentiment index Friday, which fell to 62.6 for April from 69.5 a month earlier. It was the lowest reading since the early 1980s.

The dollar has been weighed down recently by a combination of gloomy U.S. economic data and high European inflation.

That has fueled expectations that the Federal Reserve will cut interest rates yet again while the European Central Bank leaves rates unchanged - or even raises them, a possibility deflated by Thursday's German business confidence survey.

"We are just seeing a continuation of upward adjustment for the dollar on a combination of exhaustion of the euro surge, and market expectations that there may not be a lot more easing on interest rates by the Fed," said Bob Sinche, head of global foreign exchange strategy at Bank of America Corp.

UniCredit analysts said in a research note that "the U.S. dollar recovery across the board ... looks fairly excessive at this stage." They noted that "nothing has really changed on the current economic scenario."

In other trading Friday, the dollar edged down to 1.0347 Swiss francs from 1.0356 Swiss francs, but rose to 1.0178 Canadian dollars from 1.0139 Canadian dollars.