June 16, 2017 / 4:07 PM / 5 months ago

FOREX-Dollar slips on weak data, yen on back foot as BoJ stays pat

    * Housing starts, consumer mood data raise doubts on U.S. growth
    * Yen weakens as Bank of Japan sticks to ultra-loose policy

 (Updates market action; changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, June 16 (Reuters) - The dollar fell against a basket of currencies on Friday on
weaker-than-forecast data on housing and consumer sentiment, while the yen weakened after the
Bank of Japan kept interest rates steady and signaled it was in no hurry to tighten policy.
    The greenback has hovered near its lowest since November as a batch of disappointing
economic readings, together with the lack of progress on fiscal stimulus from Washington, have
overshadowed the outlook on more rate hikes from the Federal Reserve.
    Earlier Friday, the government said U.S. home construction fell for a third consecutive
month in May to its lowest in eight months, while the University of Michigan said its gauge on
consumer sentiment deteriorated in early June.
    "It raises some doubt on U.S. growth for the rest of the year," said Minh Trang, senior
currency trader at Silicon Valley Bank in Santa Clara, California.
    At 11:35 a.m. EDT (1535 GMT), the dollar index was down 0.3 percent at 97.126,
putting it on track for a 0.15 percent decline on the week.
    Friday's dour U.S. data helped erase the greenback's initial gains against the yen, which
had slid to a two-week low versus the dollar.
    The yen weakened with the Bank of Japan nowhere close to the Federal Reserve's path to
normalize monetary policy as domestic inflation has remained sluggish.
    Governor Haruhiko Kuroda said there was "some distance" to achieving the BoJ's inflation
target of 2 percent, and it was "inappropriate" to say how the Bank would exit its massive
stimulus program.
    That ran contrary to market speculation in the past month the BoJ could be considering its
own plan for eventually withdrawing emergency stimulus for the world's third largest economy. 
    The yen was about half a percent lower to 111.41 per dollar in London before rebounding to
110.80 yen in later New York trading, Reuters data showed.
    "The theme continues to be the potential for further yen weakness because they (the BoJ) are
still grappling with the deflationary mindset of the Japanese consumer," said Martin Arnold, FX
strategist at ETF Securities in London.
    The euro was up 0.3 percent to 123.97 yen after touching a near two-week high at
124.45 yen earlier Friday.
    The common currency was up 0.4 percent at $1.1191, but about a cent below a seven-month peak
of $1.1296 hit before the Fed's widely expected rate hike on Wednesday.
    Currency bid prices at 11:50AM (1550 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct
                                              Previous                   Change
 Euro/Dollar      EUR=        $1.1187        $1.1143     +0.39%         +6.41%
 Dollar/Yen       JPY=        110.8200       110.9100    -0.08%         -5.18%
 Euro/Yen         EURJPY=     123.99         123.63      +0.29%         +0.69%
 Dollar/Swiss     CHF=        0.9742         0.9750      -0.08%         -4.28%
 Sterling/Dollar  GBP=        1.2776         1.2754      +0.17%         +3.57%
 Dollar/Canadian  CAD=        1.3237         1.3268      -0.23%         -1.44%
 Australian/Doll  AUD=        0.7620         0.7576      +0.58%         +5.61%
 Euro/Swiss       EURCHF=     1.0898         1.0868      +0.28%         +1.69%
 Euro/Sterling    EURGBP=     0.8754         0.8737      +0.19%         +2.77%
 NZ Dollar/Dolar  NZD=        0.7248         0.7206      +0.58%         +4.42%
 Dollar/Norway    NOK=        8.4562         8.5054      -0.58%         -2.09%
 Euro/Norway      EURNOK=     9.4596         9.4785      -0.20%         +4.11%
 Dollar/Sweden    SEK=        8.7026         8.7500      -0.16%         -4.45%
 Euro/Sweden      EURSEK=     9.7375         9.7528      -0.16%         +1.65%

 (Additional reporting by Ritvik Carvalho in London, Tokyo Markets team; Editing by Mark
Heinrich and Chris Reese)

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