By Saqib Iqbal Ahmed and Saikat Chatterjee<\/p>\n<\/p>\n
NEW YORK, Aug 13 (Reuters) – The U.S.<\/p>\n
dollar fell to a one-week low against a basket of currencies on Friday, after a survey showed U.S. consumer sentiment dropped sharply in early August, raising worries of a dent in economic activity.<\/p>\n<\/p>\n
The University of Michigan said its preliminary consumer sentiment index fell to 70.2 in the first half of this month from a final reading of 81.2 in July.<\/p>\n<\/p>\n
That was the lowest level since 2011 and one of the six largest drops in the past 50 years of the survey.<\/p>\n<\/p>\n
Investors this week have been treated to a mixed bag of data. While U.S. producer prices data out Thursday showed surging prices, bolstering the case for the Federal Reserve removing some of its stimulus, it followed U.S.<\/p>\n<\/p>\n
consumer price data on Wednesday, which indicated inflation may be peaking, potentially giving the Fed room to remain accommodative for longer.<\/p>\n<\/p>\n
“The prime driver this week was this idea that a deceleration in inflation pressures will reduce the impetus for an earlier tapering of Federal Reserve asset purchases,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.<\/p>\n<\/p>\n
“What’s happened here is traders have moved their expectation for a tapering announcement from September toward November, perhaps even December,” Schamotta said.<\/p>\n<\/p>\n