(Adds quotes, updates prices; changes byline and dateline,
By Karen Brettell
NEW YORK Aug 15 The U.S. dollar weakened
against the euro, erasing much of the week's gains on Friday, as
investors that had bet on the greenback's strength closed out
positions before the weekend.
Investors had been trimming short bets on the euro before
U.S. data, sending the greenback lower. Some U.S. dollar selling
continued after the economic releases, including producer price
data, were in line with expectations.
Dollar weakness came even as tensions in the Ukraine were
high. NATO accused the Kremlin on Friday of escalating the
conflict, following reports that a small column of Russian
armoured vehicles had crossed overnight into an area of Ukraine
where pro-Moscow rebels are battling government forces. [ID:
"Players faced with a number of risks want to square up
positions (going into the weekend), and they were likely long
dollars," said Michael Woolfolk, global markets strategist at
BNY Mellon in New York.
"It's confounding," he added. "It suggests that risk
appetite is growing and geopolitical risks are de-escalating,
which is the opposite of what we see in the headlines."
The dollar was last down 0.30 percent against the euro
at US$1.3400, and was up 0.22 percent against the yen
at 102.65 yen.
The euro has been weighed down in the past two weeks by
concerns about the euro zone's economic prospects and
expectations for more stimulus.
U.S. data on Friday showed that U.S. producer prices rose
marginally in July as a decline in the cost of energy offset
higher prices. The Labor Department said on Friday its producer
price index for final demand edged up 0.1 percent after a 0.4
percent rise in June.
Business conditions for manufacturers in New York state
improved in August, albeit at a slower pace than expected, the
New York Federal Reserve said in a report on Friday. The New
York Fed's "Empire State" general business conditions index fell
to 14.69 from July's 25.60, which was the highest since April
The dollar index dipped 0.17 percent to 81.599,
although it was still trading near an 11-month high of 81.716
set last Wednesday.
(Additional reporting by Anirban Nag in London; Editing by Lisa