The US dollar snapped its longest weekly rally since the collapse of the Bretton Woods system in 1971 after the US Federal Reserve expressed concern that the currency’s strength posed a risk to the country’s economic outlook.
The US Dollar Index, which Intercontinental Exchange Inc uses the gauge to track the greenback against the currencies of six trade partners, fell 0.9 percent to 85.91 this week.
The index had rallied for 12 straight weeks, the longest since at least 1971, when currencies began to float after the US abandoned the Bretton Woods system that pegged the greenback to the price of gold.
The US currency fell 0.9 percent to US$1.2628 per euro, the biggest weekly decline in six months, while dropping 1.9 percent to ¥107.66 as Europe’s single currency slipped 1 percent to ¥135.96.
Hungary’s forint and South Africa’s rand led gains against the greenback on optimism that US policymakers will not accelerate hikes in record low borrowing costs that have supported global growth.
In London, a Friday report showed UK construction output unexpectedly shrank in August, adding to signs the outlook for the British economy is darkening amid a faltering eurozone, Britain’s largest trading partner.
Bank of England officials held their main interest rate at a record-low 0.5 percent this week, as forecast by all economists in a survey by Bloomberg News.
Sterling slipped 0.4 percent to £0.7870 per euro this week, while climbing 0.5 percent to US$1.6048, the biggest gain since July.
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