The dollar fell on Friday, after an overall strong U.S. first-quarter growth report was overshadowed by soft inflation data. Gross domestic product increased at a 3.2 percent annualised rate in the quarter, the Commerce Department said in its advanced GDP report, released on Friday, versus the 2.0 percent estimated by economists.
The dollar, however, did not enjoy a boost from the report as traders focused on the core personal expenditures consumption price index figure, the Federal Reserve’s preferred inflation gauge, which increased at only a 1.3% rate versus 1.8% in the prior quarter. While, the forecast-beating headline numbers defied the notion that the U.S. economy is slowing as fiscal stimulus fades, the underlying numbers offered plenty of causes for concern. Recent U.S. data has been robust and has reinforced the belief that the United States is on a firmer economic footing than other leading economies.