WASHINGTON (dpa-AFX) - The U.S. dollar saw another weak outing, sliding lower against most of its rivals on Friday amid the likelihood of a rate cut in the foreseeable future and on worries about an escalation in tensions between the U.S. and Iran.
For the third successive session, the Federal Reserve's dovish policy statement hurt the greenback. The Fed, which left the interest rate unchanged on Wednesday, said it will act 'as appropriate' to support expansion, citing prevailing 'uncertainties'.
An escalation in geopolitical tensions following the downing of a U.S. drone by Iran over the Strait of Hormuz on Thursday and reports about the U.S. very nearly launching a retaliation has prompted investors to rush for the safe haven of the yellow metal.
The dollar index, dropped to a low of 96.15 after holding near 96.50 for sometime, and was last seen moving around 96.20, down more than 0.4% from previous close. The dollar index shed about 1.5% in the week.
Against the euro, the greenback was down 0.7% at $1.1371, with fairly strong euro area economic data lifting the European currency.
The euro area private sector expanded at the fastest pace in seven months in June, as growth in the service sector offset the fall in manufacturing, flash survey data from IHS Markit showed.
The composite output index rose to a 7-month high of 52.1 in June from 51.8 a month ago. Economists had forecast the score to rise marginally to 52.0.
Private sector growth in Germany remained unchanged in June, flash data from IHS Markit showed. The flash composite purchasing managers' index, or PMI, showed a reading of 52.6 in June, same as seen in May. Economists had forecast a reading of 52.5.
Meanwhile, France's private sector grew at the fastest pace in seven months in June, with the composite output index rising more-than-expected to 52.9, from 51.2 in May. The reading was forecast to rise slightly to 51.3.
Against British pound sterling, the dollar was down by about 0.3% at 1.2739.
The yen, which weakened to 107.73 a dollar, pared its losses subsequently to trade at 107.30 a dollar, its previous close.
The Aussie was up marginally against the greenback at 0.6928 and the Swiss franc strengthened to 0.9765 against the dollar, gaining more than 0.5%.
The Canadian currency loonie was down 0.19% against the dollar, with the pair trading at 1.3217.
According to a report in the New York Times, U.S. President Donald Trump had approved targeted military strikes against Iran in retaliation for Iran shooting down a U.S. drone on Thursday, and then backed out.
Iran seems not keen on peace talks, Reuters reported, citing Iranian officials that Trump had passed a message to Tehran via Oman warning that an attack on Iran was imminent.
'He gave a short period of time to get our response but Iran's immediate response was that it is up to Supreme Leader [Ayatollah Ali] Khamenei to decide about this issue,' an anonymous Iranian official told the news agency.
In economic news, U.S. existing home sales jumped more than expected in the month of May.
A report from the National Association of Realtors showed existing home sales surged up by 2.5% to an annual rate of 5.34 million in April, while revised data showed existing home sales in April were unchanged at a rate of 5.21 million.
Economists had expected existing home sales to increase by 1.2% to a rate of 5.25 million from the 5.19 million originally reported for the previous month.
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