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* Dollar index hit 5-week lows
* Euro turns lower after Le Pen gains in Opinionway poll
* Eyes on weekend G20 meeting
By Gertrude Chavez-Dreyfuss
NEW YORK, March 17 The dollar fell to a
five-week low on Friday, remaining under pressure for a third
straight session after the Federal Reserve quashed hopes for a
further bull run in the currency by keeping a gradual pace to
its monetary tightening policy.
"At the moment, the dollar remains in correction mode, which
we had fully expected," said Fawad Razaqzada, market analyst,
Forex.com in London. "But we remain fundamentally bullish on the
greenback because the Fed remains the only major central bank
which is actively tightening its policy."
The dollar also struggled against the yen, dropping to two
week-lows, and Razaqzada said the currency pair remains in a
"technical correction phase."
He noted though if the dollar is to break out of its
mini-slump, it could do so against the yen as the Bank of Japan
is nowhere near ready to tighten monetary policy.
With the Fed policy meeting out of the way, investors are now
focused on the G20 financial leaders in Baden Baden starting
later on Friday. It will be one of the most closely-watched G20
meetings for the currency market.
Any hints of a broader push by Washington against an
appreciating dollar are likely to weaken the currency.
But a softening of the joint draft statement's language on
trade, removing a rejection of protectionism, speaks to a
promised rise in U.S. tariff barriers which has so far largely
been seen as dollar-positive.
In late morning trading, the dollar index, which
measures the greenback against a basket of six major rivals,
slipped 0.1 percent to 100.25, after earlier falling to a
The index was down almost 1 percent overall for the week and
1.2 percent since the Fed hiked rates on Wednesday.
Against the yen, the dollar fell to a two-week low and last
traded down 0.5 percent at 112.74 yen.
Data on Friday showed a steadily improving U.S. economy,
with manufacturing output rising for a sixth straight month in
February and preliminary consumer confidence for the month of
March increasing as well.
The euro, meanwhile, fell against the dollar after a poll
showed far-right anti-EU leader Marine Le Pen extending her lead
over centrist Emmanuel Macron in the first round of France's
The Opinionway poll also showed Le Pen, who has pledged to
take France out of the euro, narrowing Macron's lead in the
second round run-off.
The euro was down 0.1 percent at $1.0751 After two
days of gains against the dollar.
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Ritvik Carvalho in London; Editing by Chris Reese)