Dollar Loses Ground As Traders Bet On Rate Cuts

(RTTNews) - The U.S. dollar turned in a weak performance against its major counterparts on Friday with traders betting on a few interest rate cuts by the Federal Reserve this year.

Comments Atlanta Fed President Raphael Bostic and Chicago Fed President Goolsbee have bolstered market expectations that the central bank will begin cutting rates in September.

In economic news today, preliminary data released by the University of Michigan showed consumer sentiment in the U.S. has improved by more than expected in the month of August.

The University of Michigan said its consumer sentiment index rose to 67.8 in August after falling to 66.4 in July. Economists had expected the index to inch up to 66.9.

On the inflation front, the report said year-ahead and long-term inflation expectations were both unchanged from the previous month at 2.9% and 3%, respectively.

Meanwhile, a report from the Commerce Department said housing starts plunged by 6.8% to an annual rate of 1.238 million in July after jumping by 1.1% to a revised rate of 1.329 million in June.

Economists had expected housing starts to slump by 1.7% to an annual rate of 1.330 million from the 1.353 million originally reported for the previous month.

The dollar index dropped to 102.43, losing 0.54%. Against the Euro, the dollar weakened to 1.1024 from 1.0971, and against Pound Sterling, it eased to 1.2946, losing about 0.7% from 1.2854.

The dollar weakened to 147.62 yen against the Japanese currency. Against the Aussie, the dollar dropped nearly 1% to 0.6670.

The dollar shed ground against the Swiss franc at CHF 0.8666, losing from CHF 0.8727. Against the Loonie, the dollar dropped to C$ 1.3686 from C$ 1.3734.