2018.07.2709:48:00UTC+00Dollar Retreats As U.S. GDP Rises Slightly Less Than Forecast

The U.S. dollar trimmed some of its early gains against its major counterparts in the European session on Friday, as U.S. economy grew slightly less than expected in the second quarter.

Data from the Commerce Department showed that the real gross domestic product jumped by 4.1 percent in the second quarter following a 2.2 percent increase in the first quarter. Economists had expected GDP to surge up by 4.2 percent.

Investors await the University of Michigan's final reading on consumer sentiment in July, due at 10:00 am ET. The consumer sentiment index is expected to be unrevised from the preliminary reading of 97.1.

Sentiment was underpinned by easing trade tensions, as President Donald Trump and European Commission President Jean-Claude Juncker agreed to work toward "zero tariffs" and "zero subsidies on non-auto industrial goods."

Meanwhile, Treasury Secretary Steven Mnuchin told CNBC on Thursday that the U.S expects to reach an agreement on NAFTA in the near future.

The greenback held steady against its major rivals in the Asian session, with the exception of the yen.

The greenback pared gains to 110.96 against the Japanese yen, from a high of 111.25 seen at 5:45 pm ET. On the downside, 109.00 is possibly seen as the next support level for the greenback.

The greenback erased some of its early gains against the Swiss franc, touching 0.9959. This follows a weekly high of 0.9978 set at 8:15 am ET. The next possible support for the greenback is seen around the 0.98 level.

Following an 8-day high of 1.1621 hit soon after the data, the greenback moved down slightly to 1.1642 against the euro. If the greenback extends decline, 1.19 is possibly seen as its next support level. Figures from Destatis showed that Germany's import prices grew at the fastest pace in more than a year in June.

Import prices advanced 4.8 percent year-on-year in June, faster than the 3.2 percent increase seen in May and the expected 4.5 percent. This was the third consecutive increase and the fastest since April 2017, when prices gained 6.1 percent.

The greenback retreated to 1.3107 against the pound, from a 3-day high of 1.3083 seen at 5:50 am ET. The greenback is likely to find support around the 1.34 level.

The greenback eased to 1.3041 against the loonie, 0.7393 against the aussie and 0.6782 against the kiwi, reversing from an early high of 1.3079, 3-day high of 0.7370 and a weekly high of 0.6763, respectively. Next key support for the greenback is seen around 1.29 against the loonie, 0.75 against the aussie and 0.69 against the kiwi.

The University of Michigan's final consumer sentiment index for July is due shortly.