Dollar, bond yields dip on inflation data as stocks soar

MSCI's broadest index of Asia Pacific shares outside Japan ticked up 0.1 per cent. File

MSCI's broadest index of Asia Pacific shares outside Japan ticked up 0.1 per cent. File

Looking ahead, investors are awaiting a host of USA economic indicators, including core inflation, retail sales and industrial production for June later in the session for more insight into how the Fed might proceed.

U.S. shares were helped in part as the Senate announced a two-week delay to its August recess to allow more time to tackle a measure that would repeal key parts of Obamacare, as well as pursue other legislative priorities.

Chief economist Etsuko Yamashita said that if the US CPI would be weaker than expected, it could not only shift USD/JPY below 113 but make a new range lower than 113 instead.

The US dollar index, which tracks the greenback against a basket of six major rivals, was at 95.18, compared to 95.41 ahead of the report.

The New Zealand dollar held onto its overnight gains but was headed for a 0.8 percent weekly decline as investors await several U.S. economic indicators, including inflation numbers.

Bank of America Merrill Lynch strategists released a note to clients on Friday entitled "Take that punch bowl away", effectively pleading with the Fed to continue tightening policy and arguing that the risks to financial stability of letting the market melt higher outweigh the risks of sticking to its tightening plans and removing policy accommodation.

Amazon and other other nonstore retailer sales rose a so-so 0.4% on the month, with the annual gain slipping into single digits at 9.2%.

For the week, the S&P rose 1.4 per cent, the Dow 1.05 per cent and the Nasdaq 2.6 per cent, it's biggest weekly gain in 2017.

The greenback slipped to a 2-day low of 1.1468 against the euro, from a high of 1.1391 hit at 8:15 pm ET. The contract gained 59 cents, or 1.3 percent, to settle at $46.08 per barrel on Thursday.

"This cements the weaker trend in the dollar and lower United States yields and I think this story has got legs", Franulovich said. It hit session high at 0.7828 and made session lows at 0.7711 levels.

USA interest rates futures rose as traders pared their view the Federal Reserve would increase rates again in 2017.

The Labor Department said earlier Friday the CPI grew 1.6 percent from a year earlier in June, marking the smallest year-over-year gain since October 2016.

Federal Reserve Chair Janet Yellen has attributed the slow inflation this year to one-off, "transitory" factors, although she said central bankers are watching the data carefully.

The U.S. dollar remained broadly on the back foot against major currencies.

The less volatile 12-month CPI measure slowed three-tenths from May to 1.6 per cent, meaning it has slowed by more than a full percentage point since February, retreating further from the Fed's two per cent target.

Brent crude futures, the worldwide benchmark for oil, settled up 49 cents, or 1.01 percent, at $48.91 per barrel.U.S.

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