Dollar Index Heading For Biggest Weekly Gain Since April
The dollar continued to rebound on Friday as traders settled their positions for the end of the month and new data largely confirmed expectations for inflation and the strength of the US economic recovery.
The dollar index of major currencies rose 0.3% to 90.236 and a gain of almost 1% from the four-and-a-half-month lows reached on Tuesday.
The index is on track for its strongest weekly advance since the end of April.
The turnaround came after the dollar index lost about 3% since March, as other major economies began to catch up with vaccination rates in the United States. At the same time, the central banks of some other countries seemed likely to act faster than the US Federal Reserve to move away from easy monetary policies.
The euro fell 0.3% to $ 1.216, from a four-month high of $ 1.2266 earlier in the week.
The British pound fell 0.3% to $ 1.416, after struggling around $ 1.42 earlier this week. .
On Monday, the United States and Great Britain have public holidays.
The US economic data had been regarded as the big scheduled news for the week, but didn’t rock bond and stock markets dramatically the morning it was released. It showed that consumer prices rose in April well beyond the Federal Reserve’s 2% annual rate target. Read more
The dollar continued to gain against the Japanese yen, hitting a seven week high and rising 0.2% on the day to 110.02. Reasons for the weak yen, analysts say, include rising unemployment in Japan, falling consumer prices, and government measures to extend emergency restrictions to Tokyo and other areas due to the COVID-19 pandemic. Read more
The Chinese ground yuan hit a new three-year high and traded around 6.37 against the dollar.
Kenneth Broux, FX strategist at Societe Generale, said the fact that the yuan was stronger than 6.40 for three days could be a turning point in Chinese policy that would be positive for the global economy.
“No one thought the central bank would allow the yuan to strengthen beyond 6.40, and they did,” Broux said.
The New Zealand dollar, which jumped this week on the prospect of an interest rate hike by September 2022, fell 1% against the greenback earlier in the day. .
In cryptocurrencies, bitcoin fell around 5% to $ 36,682 in the morning in New York City, while ether fell 7% to around $ 2,561.
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Currency bid rate at 9.45 a.m. (1.45 p.m. GMT)
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