Dollar Extends Slide As Economy Contracts

The U.S. dollar continued to be weaker on Friday, after data showed that U.S. economic activity contracted for the first time in a year in the first quarter of 2015.

Revised data released by the Commerce Department showed that the gross domestic product fell by 0.7 percent in the first quarter compared to the previously reported 0.2 percent uptick. The drop came on the heels of a 2.2 percent increase in the fourth quarter.

The revised decrease in GDP in the first quarter was still slightly smaller than the 0.8 percent drop expected by economists.

The U.S. consumer sentiment and Chicago-area business activity are due out shortly, which may offer further clues about the state of economy.

The greenback has been rallying this week as positive economic data supported hopes that Federal Reserve may start raising rates around September. Nevertheless, the greenback was trading mixed on Thursday.

In Asian trading, the currency was steady against the euro and the franc but fell against the yen and the pound.

In European trading, the greenback depreciated by 0.35 percent to hit a weekly low of 0.9392 against the franc, compared to yesterday's closing value of 0.9425. The next possible support for the greenback-franc pair may be located around the 0.92 zone.

Data published by the State Secretariat for Economic Affairs revealed that the Swiss economy shrank unexpectedly in the first quarter largely due to weak exports.

Gross domestic product fell 0.2 percent sequentially in the first quarter, reversing the prior quarter's 0.5 percent increase.

The greenback declined to a 4-day low of 1.0996 against the European currency, down by 0.46 percent from Thursday's closing quote of 1.0946. Next key support for the greenback is likely seen around the 1.10 region.

Preliminary figures from the statistical office Destatis showed Germany's retail sales increased at a faster-than-expected pace in April, after declining in the previous two months.

Retail sales climbed a seasonally and calender-adjusted 1.7 percent month-over-month in April, in contrast to a 1.4 percent decline in March.

Reversing from an early nearly 3-week high of 1.5235 against the pound, the greenback dropped to 1.5295. At Thursday's close, the pair was valued at 1.5310. Continuation of the greenback's downtrend may take it to a support around the 1.54 region.

On the flip side, the greenback remained firmer against the yen, trading around yesterday's closing value of 123.94. This may be compared to an early low of 123.60.

Data from the Ministry of Internal Affairs and Communications showed that Japan's consumer prices increased at a slower rate in April compared to the previous month.

The consumer price index were up 0.6 percent on year in April, slower than the previous month's 2.3 growth.