The euro pulled off a 2-year low against the dollar on Friday as Chinese growth data came in as expected and despite Moody's downgrade on Italy's credit rating.
The euro traded at a low of $1.2156 before later recovering to $1.2245 compared to $1.2197 on Thursday as traders went short in thin trading. The euro remained down 0.2 percent for the week.
Figures showed China's economy grew at its slowest rate in over three years during the second quarter. Gross domestic product grew at an annual rate of 7.6% compared to 8.1% in the previous quarter. While growth slowed, many analysts had feared for worse.
The single currency gained against the Japanese yen, rising 0.2% to ¥96.90 yen despite Moody's surprise cut on Italy and a warning that could further downgrade the nation's credit rating, which is currently two notches above junk status.
The dollar index, which measures the US currency against a basket of six others, fell to 83.324 from 83.666 the previous session.
Investors mostly overlooked data which showed US producer prices rose just slightly last month as energy costs eased. Falling inflationary pressures prompted speculation that the Federal Reserve may have more room to ease monetary policy.
Against the yen, the dollar bought ¥79.29 compared to ¥79.33 on Thursday.
Sterling added to recent gains against the dollar on Fridy as risk appetite picked up and touched over a 3-year high against the euro after Italy was downgraded by Moody's.
Datafeed and UK data supplied by NETbuilder and Interactive Data.
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