(RTTNews) - The dollar steadied Friday morning after suffering significant losses earlier in the week amid renewed confidence that Europe has taken concrete steps toward ending its sovereign debt crisis.
Markets were taking a breather to assess the deal announced Thursday.
Lenders will take a voluntary 50% writedown on Greek government debt, the lending capacity of the of European Financial Stability Facility fund will be increased, and the region's banking system will be recapitalized with 106 billion euros.
Still, Italian borrowing costs spiked this morning, suggesting that the bond markets require more convincing from EU officials.
EFSF chief Klaus Regling said Friday that he did not expect a "precise outcome" from his talks with Chinese officials and investors over the Asian country's participation in Europe's bailout efforts.
The dollar held near $1.4175 versus the euro, after falling to a 7-week low of $1.4246 on Thursdsay. A similar pattern was seen versus sterlig, with the dollar stable near yesterday's 7-week low of $1.6141.
Confidence among British consumers fell unexpectedly in October, to reach its lowest level since February 2009, with their outlook about the general economic situation becoming increasingly pessimistic, results of a key survey showed Friday.
Research firms GfK NOP said that its confidence index fell to -32 in October from -30 in September. Last year, the index was at -19.
There was little movement versus the yen, with the dollar hovering just above Thursday's record low Y75.65.
With commodities getting a lift from optimism about Europe, the dollar was stuck below parity versus its resource-backed Canadian counterpart.
Looking at today's economic calendar, the Bureau of Economic Analysis is due to release its personal income & outlays report for September at 8:30 am ET. Economists expect the report to show that personal income as well as personal spending rose 0.3 percent each from the previous month. In August, personal spending had risen by 0.2 percent and personal income by 0.1 percent.
The third quarter GDP report released yesterday showed that positive consumer spending trends supported a quickening in the pace of growth.
The Reuters/University of Michigan's final report on the consumer sentiment index for October is scheduled to be released at 9:55 am ET. The consumer sentiment index is expected to be upwardly revised to 58 from the mid-month reading of 57.5.
