The dollar rebounded against the euro on Friday (20th), but it was still unable to recover this week’s losses, stopping the US dollar index (DXY) from a six-week winning streak and writing its worst weekly performance since February.
In late New York trading, the ICE U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, was at around 103.03.
The dollar appreciated 0.3% against the euro, but still depreciated 1.3% this week, the worst performance since early February, and the recent surge in heat shows signs of fading.
The dollar has risen in 12 of the past 14 weeks and once bottomed out at 105.01 last week, its highest level since January 2003.
“The dollar is taking a break from its recent rally,” Capital Economics analyst Jonas Goltermann said.
In recent months, investors have looked to the dollar as a safe haven in the face of soaring inflation, a hawkish Federal Reserve and the Russian-Ukrainian war. But with the U.S. dollar already high, coupled with heightened volatility in global financial markets this week, investors have turned to the yen and Swiss franc.
The Swiss franc gained nearly 3 percent against the dollar this week, the biggest gain in more than two years, while the yen also gained about 1 percent for the week.
Juan Perez, head of trading at Monex USA, also said that the dollar is a bit high, which gives other currencies room to rise.
Sterling rose just 0.1% against the dollar on Friday, but has gained 1.65% for the week, its biggest gain since December 2020. Britain reported on Friday that retail sales unexpectedly increased in April, playing down market expectations that the Bank of England (BOE) may not raise interest rates aggressively.
The money market expects that the BOE may raise interest rates by another 25 basis points (1 yard) at the June meeting, raising interest rates by a total of 128 basis points by the end of the year, which is higher than the expected increase of 115 basis points on Tuesday.
But analysts were hesitant to see whether the dollar would continue to fall. Societe Generale FX strategist Kenneth Broux said the dollar’s weakness was related to the recent slide in inflation-adjusted U.S. Treasury yields, but it was too early to say that the dollar’s rally had peaked.
He believes that the dollar is likely to weaken in the longer term only if there are signs of strong economic growth outside the United States, especially in Europe and China. Broux added that China’s move on Friday to cut a key lending indicator could help the Chinese economy.
In cryptocurrencies, Bitcoin fell more than 4% to around $29,009.94 amid generally weak risk appetite.
As of Saturday (21st) about 6:00 Taiwan time Price:
The dollar index was at 103.0504. +0.16% EUR/USD (EUR/USD) is quoted at 1 EUR = 1.0560 USD. -0.22% The British Pound to US Dollar (GBP/USD) exchange rate was quoted at 1 pound to $1.2487. +0.13% The Australian dollar against the US dollar (AUD/USD) is quoted at 1 Australian dollar to US$0.7032. -0.18% The US dollar to Canadian dollar (USD/CAD) exchange rate was quoted at 1.2837 Canadian dollars for 1 US dollar. +0.11% USD/JPY is quoted at 127.85 yen per dollar. +0.02%