The euro steadied near 14-month lows against the dollar on Friday on concerns that rigorous fiscal tightening in Europe would dampen an already-weak recovery. The New Zealand dollar was on the defensive after sluggish retail data reaffirmed expectations of a subdued recovery in the country, which will temper expected interest rate rises from the central bank this year.
The battered euro was at $1.2545, up 0.1 percent from levels seen in New York on Thursday. The single-currency is on the way to ending a volatile week in negative territory against the dollar after a massive $1 trillion emergency rescue package reached on Monday boosted it to near $1.31. Traders said euro buying has been coming in when the euro nears the $1.25 level in Asian trade, where players suspect some large option barriers are in place.
It hovered around 1.4010 Swiss francs, holding above a record low of 1.3997 francs hit on trading platform EBS on Thursday. The dollar index inched up 0.1 percent to 85.33, near a 13-month high of 85.459 reached this week. Traders say, if the euro breaks below $1.25, stop-loss selling could see it push toward $1.2330, its October 2008 low.
The euro edged up 0.2 percent to 116.50 yen after falling below 116 yen in early Asian trade. Gains in the European single-currency were limited partly on concerns about Japanese retail money flowing out of the eurozone, traders said. The dollar stood at 92.90 yen, up 0.2 percent from late trade New York trade. Sterling steadied a day after worries about Britain's public finances undermined it. Sterling was up 0.1 percent at $1.4625, having shed 1.4 percent on Thursday after data showing the UK goods trade deficit widened more than expected in March..
The New Zealand dollar fell to near $0.71 after data showed on Friday that seasonally adjusted first quarter retail sales rose 0.2 percent, compared with a Reuters poll forecast of a 0.3 percent increase. The currency then recovered early losses to trade at $0.7132, almost flat from late US trade.