Home Forex Dollar Higher on Friday after U.S. Data, Tax Plan Reveal

Dollar Higher on Friday after U.S. Data, Tax Plan Reveal

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The dollar was broadly higher against other major currencies on Friday, despite U.S. data being weaker than expected.

The U.S. Commerce Department reported on Friday that increases in consumer spending last month were in line with expectations, up 0.1%. Core inflation, however, eased unexpectedly.

The core personal consumption expenditures price index eased to 1.3% in August, down from 1.4% in July. The Federal Reserve is targeting a 2% reading.

The weak inflation data weighed on the greenback, as did speculation of Federal Reserve Chair Janet Yellen being replaced. U.S. Treasury Secretary Steven Mnuchin and President Donald Trump reportedly had a meeting with Kevin Warsh to discuss his possible nomination as Yellen’s replacement.

Warsh served as a Fed Governor from 2006 through 2011. He was also a member of the former Fed chairman Ben Bernanke’s circle of advisers.

The greenback found support after U.S. Donald Trump revealed a plan on Wednesday to lower taxes for Americans and businesses.

Trump’s plan still faces challenges, as the Republicans in Congress are divided over the issue and Democrats are against it.

The pound slipped 0.36% against the dollar, trading at 1.3394. The dollar also gained against the yen, trading up 0.29% to 112.63.

In the UK, the Office for National Statistics reported that gross domestic product increased by 1.5% in the second quarter of the year, failing to meet expectations of a 1.7% expansion. The UK economy grew by 0.3% in the three-month period ended June.

The euro, however, gained against the greenback, up 0.13% to 1.1802. The gain comes despite data on Friday showing that the consumer price inflation held steady in September instead of increasing as expected.

Elsewhere, the Australian dollar was weaker against the dollar, falling 0.15% to 0.7844. The New Zealand dollar held steady at 0.7233.

Against the Canadian dollar, the greenback gained 0.18% to trade at 1.2450.

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