U.S. Dollar Slides On Dismal Economic Data

The U.S. dollar fell against its major counterparts in the Asian session on Friday, as a plunge in Philadelphia Federal Reserve's manufacturing index overnight raised concerns that a trade war would hurt the economic outlook.

Data from the Federal Reserve Bank of Philadelphia showed a much bigger than expected slowdown in the pace of growth in regional manufacturing activity in the month of June.

The Philly Fed said its index for current general activity slumped to 19.9 in June from 34.4 in May. While a positive reading still indicates growth in regional manufacturing activity, the index had been expected to dip to 29.0.

Trade worries lingered after China's commerce ministry spokesman Gao Feng accused the U.S. of using bullying tactics and blackmail in threatening to impose tariffs on hundreds of billions of dollars of Chinese imports.

Separately, U.S. Commerce Secretary Wilbur Ross said on Thursday the end goal of the trade negotiations is to reduce high trade barriers and tariffs for U.S. firms.

The greenback dropped to a 3-day low of 1.1641 against the euro, 8-day low of 0.9890 against the franc and a weekly low of 1.3293 against the pound, from its early highs of 1.1598, 0.9923 and 1.3236, respectively. The greenback is likely to find support around 1.19 against the euro, 0.97 against the franc and 1.35 against the pound.

The greenback dropped to 2-day lows of 0.6908 against the kiwi and 0.7409 against the aussie, reversing from its early highs of 0.6859 and 0.7373, respectively. The next likely support for the greenback is seen around 0.72 against the kiwi and 0.75 against the aussie.

The greenback edged down to 1.3287 against the loonie, off its early high of 1.3322. Next key support for the greenback is likely seen around the 1.31 level.

On the flip side, the greenback bounced off to 110.17 against the yen, from an early low of 109.84. If the greenback rises further, 111.5 is likely seen as its next resistance level.

Looking ahead, PMI reports from major European economies are due in the European session.

In the New York session, Markit's U.S. manufacturing PMI for June, Canada retail sales for April and consumer price index for May are scheduled for release.