Dollar index pares advance after downbeat U.S. confidence data

The dollar pared some of its gains versus a basket of major currencies after a report showing U.S. consumer confidence dropped this month.

University of Michigan confidence (preliminary reading) came in at 81.3 in July, compared with both flash and estimated reading of 82.5 and 83.0 respectively.

However, the dollar traded higher on Friday, set for a weekly advance, as dovish comments from fed officials spurred dollar’s outlook.

Fed Chair Janet Yellen mentioned on Tuesday that interest rates could rise earlier than market anticipation if both inflation and labor market data showed remarkable progress.

The Fed may have to raise the borrowing cost earlier than predicted as unemployment drops and inflation accelerates, St. Louis Fed President James Bullard said yesterday.  

The USDJPY rebounded to hit a peak of 101.43 after falling to a low of 101.07.

Against a basket of major currencies, the dollar index pared some of its gains to retreat from a peak of 80.74 to 80.65.  

The EURUSD resumed its drop amid worries of slowdown in euro area growth amid the low inflation encountering the 18-nation region.

The pair is meanwhile trading around 1.3057 after touching a high of 1.3535 and a low of 1.3489.

The GBPUSD dropped for a third day on profit taking after hitting a peak of 1.7188 this week. 

The pair slipped to a bottom of 1.7034 after hitting a high of 1.7115.

Next week, eyes will focus on U.K. second-quarter GDP, retail sales for June and BOE minutes for July policy meeting.