The dollar held steady on Friday despite a government report showing slower US first-quarter economic growth, with the currency on track to end its strongest week since November 2016, having gained 1.4 percent. On Tuesday, the US benchmark government bond yield broke through the psychologically significant 3 percent level for the first time in more than four years as investors reduced their US bond holdings on worries about rising inflation and growing government debt supply.
While Friday extended the week's gains, the dollar's move was muted by comparison, last up just 0.1 percent at 91.671 against a basket of six currencies, though still its highest since January 12. "The market's taking a bit of a breather after some significant moves over the better part of last week," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc, in Washington D.C.
The US economy slowed in the first quarter as consumer spending grew at its weakest pace in nearly five years, the Commerce Department reported. But the setback may be temporary against the backdrop of a tightening labor market and large fiscal stimulus.
Sterling was the biggest loser among major currencies on Friday as weaker-than-expected first-quarter growth numbers further whittled away at the likelihood of a rate hike next month.
The pound fell as low as $1.375 against the dollar, more than 1 percent weaker, after data showed Britain's economy grew at its slowest pace since the fourth quarter of 2012.
Against the yen, the dollar rose to a top of 109.53 yen on Friday, the highest level since February 8. The euro, in which speculators held record long positions, fell to $1.205 on Friday, its lowest since January 12.
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