Forex News: U.S. Dollar Falls As European Shares Traded Higher

U.S. Dollar Falls As European Shares Traded Higher

(RTTNews) - The U.S. dollar weakened against other major currencies in the early European session on Friday, as the European stocks traded higher after U.S. President Donald Trump said he would decide within two weeks whether to authorize a direct U.S. military strike on Iran, citing a "substantial chance of negotiations."

Trump was holding off on final decision to see if Tehran gives up its nuclear program, the Wall Street Journal reported, citing sources.

Separate reports suggest that the U.S. will launch strikes against Iran only if the so-called "bunker buster" bomb was guaranteed to destroy Iran's deep-underground Fordow nuclear site.

U.S. stock futures dipped on concerns the Israel-Iran conflict could lead to a renewed spike in inflation and dent U.S. economic growth.

Geopolitical concerns remain in play, with Israeli Prime Minister Benjamin Netanyahu ordering intensified strikes on Iran, targeting 'strategic' and 'government' sites in Tehran, following a reported Iranian missile strike on a hospital in Beersheba.

An Iranian missile struck a premier research institute in Israel known for its work in life sciences and physics, among other fields.

The dollar declined but was set to log its biggest weekly rise in over a month due to tariff, inflation and Middle East concerns.

In the early European trading today, the U.S. dollar fell to a 2-day low of 1.1526 against the euro and a 3-day low of 1.3496 against the pound, from yesterday's closing quotes of 1.1512 and 1.3476, respectively. If the greenback extends its downtrend, it is likely to find support around 1.16 against the euro and 1.36 against the pound.

Against the yen and the Swiss franc, the greenback dropped to 145.13 and 0.8159 from Thursday's closing quotes of 145.23 and 0.8165, respectively. The dollar may test support near 142.00 against the yen and 0.80 against the franc.

Against Australia, the New Zealand and the Canadian dollars, the greenback edged down to 0.6495, 0.6007 and 1.3688 from yesterday's closing quotes of 0.6486, 0.6001 and 1.3695, respectively. On the downside, 0.66 against the aussie, 0.61 against the kiwi and 1.34 against the loonie are seen as the next support level for the greenback.

Looking ahead, Canada new housing price index for May, retail sales data for April, PPI for May, raw material prices data for May, U.S. Philadelphia Fed manufacturing index for June, U.S. Consumer Board's leading index for May, U.S. Baker Hughes oil rig count data and Eurozone flash consumer confidence for June are slated for release in the New York session.

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