NEW YORK: The US dollar broke a three-day losing streak on Friday as a recent selling spree fueled by the idea that the Federal Reserve’s tough moves were largely undervalued, and risks in financial markets. His appetite was weak. Because of this, investors gave up on riskier currencies.
The US dollar index was up 0.3% at 95.157, but is still set to end the week down by about 0.6%, its worst weekly performance since early September.
The greenback, which rose more than 6% against a basket of currencies in 2021, came under pressure this week despite Fed Chair Jerome Powell saying the US economy is poised for the start of tighter monetary policy and the biggest annual increase in inflation . showing. in nearly four decades.
“Investors believe the USD is overbought and that the Fed’s tougher moves and the likes of the euro offer better potential returns down the road,” Scotiabank forex strategists said in a note.
“We don’t agree, but we have to admit that the USD did shock its peers – psychologically, at least – by breaking out with supportive yield spreads and breaking below the base of their recent consolidation range.” is thought.”
Analysts said the hedge fund dollar’s position is close to the highest level since the start of 2020, adding to the selling pressure on the dollar this week.
US retail sales fell the most in 10 months in December, possibly the result of Americans starting their holiday shopping in October to avoid empty shelves at stores. [nL1N2TU18H]
On Friday, the dollar struggled to advance against the Japanese yen, with the US currency falling 0.02% to more than a three-week low of 114.15 yen.
The safe-haven Japanese currency has benefited from the recent souring of risk sentiment in global financial markets.
Policymakers at the Bank of Japan are debating how soon they can begin telegraphing a final interest rate hike, which could come even before inflation hits the bank’s 2% target, Reuters reported. Reported on Friday.
The Australian dollar, seen as a liquid proxy for risk appetite, fell 0.99% to a two-day low on Friday as global stock markets were under pressure and Treasury yields were higher.
Sterling was 0.22% lower against the dollar as investors assessed the impact of a potential leadership change in the country as Prime Minister Boris Johnson was given the biggest break of his premiership following revelations about a series of gatherings in Downing Street during the COVID-19 lockdown. The important part was given. , faced a serious crisis.
The cryptocurrency struggled to make a meaningful rally after sharp losses at the start of the week. Bitcoin rose nearly 1% on the day to $43,086.34, not exceeding its five-month low of $39,558.70 on Monday.
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