The U.S. dollar was broadly lower on Friday as a combination of uninspiring U.S. economic data and political uncertainty kept traders biased toward the euro and other world currencies.
The euro and other major currencies rose against the dollar after the release of U.S. second-quarter gross domestic product estimates that largely met economists’ expectations.
Some analysts pointed to a smaller-than-expected increase in U.S. labor costs, but others suggested the data was just an excuse for traders to continue the weak dollar trade that has sent the U.S. currency lower for much of this year.
U.S. GDP growth picked up to 2.6 percent in the second quarter, matching expectations of economists polled by Reuters, while growth in the first quarter was revised down to 1.2 percent.
“It doesn’t do much to add to the debate about the outlook for (monetary) policy going forward,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
“So what we’re left with is an environment where momentum is clearly working against the U.S. dollar and clearly working for the euro.”
The euro has risen nearly 3 percent against the dollar so far this month and more than 11.5 percent this year. It is on track for its third straight weekly gain and the fourth in five weeks.
On Friday, the euro moved higher against the dollar, and was last up 0.65 percent at $1.1751. The euro rose to its highest against the greenback in 2-1/2 years on Thursday before retreating in later trading.
The weakness of the dollar has been most evident against the euro this year, but it has fallen against most other currencies as expectations for U.S. fiscal stimulus and an increased pace of interest rate increases from the Federal Reserve have dissipated.
The lack of surprising economic data allowed traders “to focus on the failed healthcare bill overnight, which further undermines expectations for implementation of the administration’s economic policies,” Esiner said. “And that’s ultimately a dollar-negative story.”
The dollar fell 0.9 percent to C$1.2440 against the Canadian dollar after Canada’s GDP growth in May was triple what economists expected, rising 0.6 percent for the month and 4.6 percent year over year.
Against the Swedish crown, the dollar fell 1.2 percent to 8.1024 crowns, the lowest since June 2016 after Sweden’s second-quarter GDP beat expectations, growing 4 percent year over year.
The Swiss franc fell for a fourth straight day and was set for its largest monthly drop in six years against the euro.