(Adds industrial production data, updates prices)
By Karen Brettell
NEW YORK Aug 15 The U.S. dollar weakened
against the euro on Friday, erasing much of the week's gains, 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
the release of U.S. economic data on Friday, sending the
The dollar pared some of its weakness after data showed that
U.S. industrial production edged higher in July, as production
of auto parts and motor vehicles rose 10.1 percent.
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
armored vehicles crossed overnight into an area of Ukraine where
pro-Moscow rebels are battling government forces.
"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 0.25 percent against the euro
at US$1.3396, and was up 0.21 percent against the yen
at 102.65 yen.
The euro has been weighed down over the past two weeks by
concerns about the euro zone's economic prospects and
expectations of more stimulus.
Other U.S. data on Friday showed that U.S. producer prices
rose marginally in July, held back by a decline in the cost of
energy. The Labor Department said on Friday its producer price
index for final demand edged up 0.1 percent after a 0.4 percent
increase 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 0.16 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
Von Ahn and Steve Orlofsky)