CURRENCIES: Dollar Spins Wheels Ahead Of GDP Report Expected To Show Faster Clip Of Growth

Swiss franc falls for fourth-straight day, on track for biggest monthly drop in six years

The U.S. dollar churned lower against most rivals save for the depreciating Swiss franc on Friday ahead of an update on the broadest measure of the U.S. economy--a GDP report that could help shape the Federal Reserve's so far slow-moving approach to interest rates.

The ICE U.S. Dollar Index , which tracks the greenback against a half-dozen other major rivals, fell 0.2% to 93.75. It had gained modestly on Thursday, bouncing off the 13-month low it touched on Wednesday, according to FactSet data.

Some analysts expect the battered dollar to start to recover, at least short term, if GDP numbers surprise on the upside. That's after the dollar turned broadly lower midweek as the Fed was seen as striking a cautious note on inflation. Inflation was "running below 2%", the Federal Open Market Committee said (, tweaking language from June's statement in which it said inflation was "running somewhat below 2%."

Read:Why the GDP report may show U.S. economy growing twice as fast (

"The U.S. will be of particular interest, with expectations currently for quite a sizeable upward revision to 2.5% [for GDP from the first quarter to the second quarter], which would make the first half of the year not the shambles it first appeared," said Craig Erlam, senior market analyst with Oanda.

"With inflation and jobs data still to come next week, it could also act as another incentive for the Fed to pursue another rate hike this year -- although that's unlikely to come until December -- with policy makers comfortable with the path the economy is on," he said.

The Swiss franc fell for a fourth-straight day Friday and is on track to post its biggest monthly drop in six years against the euro as some hedge funds sold the currency after it punctured major technical levels this week.

The franc's initial drop against the euro came after Swiss National Bank chief Thomas Jordan reiterated in an interview to Le Temps on Monday that the currency was still "significantly overvalued."

Against its U.S. counterpart, the euro bought $1.1713 Friday compared to $1.1676 late Thursday. The euro hit $1.1735 earlier this week, the highest since Jan. 14, 2015. The euro has strengthened 11% so far this year.

In data, the French economy expanded 0.5% in the second quarter, with statistics agency Insee's first estimate of growth showing exports climbed 3.1% while imports slowed. Also from France, inflation rose 0.7% in July (, the same rate notched in June.

German consumer prices rose ( by a faster-than-expected rate of 0.4% in July on the month, and inflation rose 1.5% on the year, according to Destatis.

The pound was at $1.3092, up from $1.3066 late Thursday. The pair hit $1.3122 on Wednesday, the strongest New York close since September. Since the start of the year, the pound gained nearly 6% against the buck.

The dollar fell against the yen , buying Yen111.20 versus Yen111.26.

(END) Dow Jones Newswires

July 28, 2017 07:14 ET (11:14 GMT)