Investing.com - The dollar pushed higher on Friday after the release of upbeat U.S. data on producer prices and industrial output, but still ended the week broadly lower against a basket of major currencies as uncertainty over China weighed.
The greenback was boosted after data showing that U.S. producer prices were higher for a third straight month in July, while factory output increased at the fastest rate in eight months.
But another report showed that U.S. consumer sentiment dipped slightly in this month.
The positive data bolstered the outlook for third quarter growth and underlined expectations for a rate hike by the Federal Reserve as early as next month.
EUR/USD was down 0.35% to 1.1110 in late trade, paring back weekly gains to 1.4%.
USD/JPY was at 124.28 in late trade, off lows of 124.06, and ended the week little changed.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose to 96.61 following the release of the data. The index still ended the week down 1.12%, the largest decline in nine weeks.
The dollar had weakened broadly earlier in the week after China devalued its currency in a surprise move on Tuesday, in a bid to shore up growth in the flagging economy.
The People’s Bank of China described the move as a “one-off depreciation”, based on a new way of managing the exchange rate that better reflected market forces.
Uncertainty over the impact of the devaluation on global inflation expectations and the outlook for growth in China sparked fears that the Fed could keep short-term interest rates on hold for longer.
The move boosted the euro as investors moved to unwind euro-funded positions on the Chinese currency.
In the euro zone, preliminary data on Friday showed that economic growth in the region slowed to 0.3% in the second quarter, down from 0.4% in the first three month of this year.
The data was offset after the Greek government approval of a deal with creditors on a €85 billion euro bailout.
In the week ahead, investors will be awaiting the minutes of the Fed’s July meeting for any indications on its plans to hike interest rates for the first time since 2006.
Data on euro zone private sector activity on Friday and U.S. inflation data on Wednesday will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, August 17
Japan is to release what will be closely watched preliminary figures on second quarter economic growth.
Switzerland is to publish data on retail sales.
The U.S. is to release a report on manufacturing activity in the New York region.
Tuesday, August 18
The Reserve Bank of Australia is to publish the minutes of its latest monetary policy meeting, giving investors insight into how officials view the economy and their policy options.
The U.K. is to release data on consumer price inflation.
The U.S. is to release data on building permits and housing starts.
Wednesday, August 19
Japan is to release data on the trade balance.
New Zealand is to release data on inflation expectations.
The U.S. is to release figures on consumer inflation. Later in the day, the Federal Reserve is to publish the minutes of its July monetary policy meeting.
Thursday, August 20
The Bank of Japan is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Switzerland is to release data on the trade balance.
The U.K. is to publish figures on retail sales.
Canada is to produce data on wholesale sales.
The U.S. is to release reports on initial jobless claims, existing home sales and manufacturing activity in the Philadelphia region.
Friday, August 21
China is to release preliminary data manufacturing activity.
The euro zone is to release survey data on manufacturing and service sector activity.
The U.S. is to release data on public sector net borrowing.
Canada is to publish figures on consumer inflation and retail sales.
The U.S. is to round up the week with preliminary data on manufacturing activity.