The dollar index (DXY00) on Friday recovered from a 2-1/2 week low and finished higher by +0.20%. Higher T-note yields Friday supported moderate gains in the dollar. Also, weakness in the yen was bullish for the dollar after a Bloomberg report said BOJ officials still see the need to continue with monetary stimulus. A negative factor for the dollar was Friday’s rally in stocks that curbed liquidity demand for the dollar.
EUR/USD (^EURUSD) on Friday fell by -0.30%. A rebound in the dollar on Friday from a 2-1/2 week low sparked long liquidation in the euro. Also, an unexpected decline in Italy's Apr industrial production raises economic concerns for the Eurozone and was bearish for EUR/USD. Losses in the euro were limited by central bank divergence on the prospects for the Fed to pause raising interest rates next week while the ECB continues to raise interest rates.
