The U.S. dollar index fell on Friday but ended the week in the red as investors took advantage of a strong rally to take profits as the dollar climbed to a 20-year high as they assessed the path of the Federal Reserve’s rate hike more than 0.9%.
The ICE U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, was down 0.52% at 107.98 in late New York trade, up 0.91% for the week. Expectations that soaring inflation will see the Fed raise interest rates faster and more aggressively have pushed the dollar higher this week.
In terms of economic data, the United States announced on Friday that the latest retail sales and the consumer confidence index of the University of Michigan were better than expected. The unexpectedly strong economic data once caused the dollar to rise briefly, and then fell volatile.
Retail sales were a bit better than expected, but that could be due to inflation, said Joseph Trevisani, senior analyst at FXStreet.com. He added that investors were closing their positions ahead of the weekend after a long and strong rally in the dollar.
Other data showed U.S. inflation expectations in a U.S. consumer survey eased in July, while an index of industrial production slipped further in June.
The U.S. inflation rate, which has repeatedly hit a multi-year high, intensified market concerns this week about the Fed raising interest rates by 4 yards this month. Then cool down.
Atlanta Fed President Raphael Bostic warned Friday that the Fed should not take drastic action that could disrupt still-strong trends in the broader economy, such as corporate hiring.
The euro recovered from 20-year lows against the dollar, gaining 0.67% to $1.0084, down nearly 1% for the week. The euro, which has been sluggish this week, is expected to usher in two major catalysts next week, namely the European Central Bank (ECB) policy trend and the progress of the restart of the Nord Stream 1 pipeline.
The market expects that the European Central Bank will announce a 1-yard interest rate hike at the meeting next Thursday (21st), which is the first time the ECB has raised interest rates since 2011. Another key is the Nord Stream 1 natural gas exported from Russia to Germany. Whether the pipeline will reopen on July 21 as originally expected, European governments are concerned that Russia may extend the deadline in order to limit gas supplies to Europe.
The Australian dollar rose 0.64 percent to $0.6789, as concerns over global economic growth dragged the Australian dollar to a two-year low the previous day. The yen, which recently hit a 24-year low, also recovered slightly, rising 0.38% against the dollar to 138.44 yen against the dollar.
As of Saturday (16th) Taiwan time about 6:00 Price:
The dollar index was at 108.0071. -0.6002% The euro against the US dollar (EUR/USD) was quoted at $1.0084 per euro. +0.6588% GBP/USD (GBP/USD) was quoted at $1.1861. +0.3044% The Australian dollar against the US dollar (AUD/USD) was quoted at 1 AUD=0.6789. +0.6822% The US dollar against the Canadian dollar (USD/CAD) was quoted at 1.3024 Canadian dollars per US dollar. -0.7241% The U.S. dollar was quoted at 138.44 yen against the Japanese yen (USD/JPY). -0.3814%