By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) -- The U.S. dollar weakened against major rivals in Asian trading hours on Friday, unable to build on the previous session’s data-inspired rally.
The dollar index (DXY 78.67, -0.15, -0.19%) , which tracks the greenback against a basket of six other currencies, traded at 78.680, compared to 78.846 In late North American trading.
Foreign exchange strategists at Barclays Capital noted that the U.S. dollar rallied hard on the back of better-than-expected U.S. economic data.
“While the move looks significant at first glance on a day-to-day basis, we note that the U.S. dollar has been trading within a well-defined range since the end of November,” they said.
This could persist in the near term, they said, with the U.S. Federal Reserve yet to completes its $600 billion asset purchase program and euro area debt issues as yet unresolved.
The euro (EURUSD 1.3503, +0.0034, +0.2524%) advanced to $1.3494, up from $1.3469 in late North American action.
German business sentiment data for January is due out later in the session and RBC Capital Markets strategists said that they are expecting an Ifo reading near the record high reading of 109.9 recorded in December.
Strategists at Lloyds Corporate Markets added: “The German economy faces fundamentally different challenges in 2011. However, its export-led growth model continues to motor along, underpinned by resurgent global demand.”
Sterling (GBPUSD 1.5924, +0.0022, +0.1383%) traded at $1.5909, compared to $1.5910 in late U.S. action, with U.K. retail sales data due out in the session.
Against the Japanese currency, the dollar (USDYEN 82.8400, -0.1600, -0.1928%) traded at 82.90 yen, down from ¥82.99 recorded in late trading on Thursday. See real time currency quotes and tools.
