Sun, Jul 02, 2017 - Page 14 News List

US dollar records biggest quarterly decline in years

Reuters, NEW YORK

The US dollar recovered slightly on Friday, but posted its biggest quarterly decline against a basket of rival currencies in nearly seven years after hawkish signals from foreign central banks this week pressured the greenback.

Investors have ramped-up expectations for tighter monetary policy from the European Central Bank, Bank of England and Bank of Canada after hints from officials this week.

This has made the greenback less attractive, in addition to skepticism that the US Federal Reserve would be able to raise interest rates again this year given a recent batch of weak US economic data and doubts that US President Donald Trump could enact his pro-growth agenda.

The US dollar index, which measures the greenback against a basket of six major currencies, declined about 4.6 percent for the second quarter to mark its steepest quarterly percentage drop since the third quarter of 2010.

The index on Friday rose 0.1 percent to 95.704, but lost 1.6 percent from last week’s 97.428.

In Taipei, the New Taiwan dollar fell against the US dollar losing NT$0.066 to close at NT$30.436. For the week, the NT dollar is down 0.1 against the greenback from last week’s NT$30.400.

The euro rose more than 7 percent against the greenback for its biggest quarterly percentage gain since the third quarter of 2010. It was down 0.2 percent against the US dollar on Friday at US$1.1416. Still, the common currency rose 2 percent against the greenback this week.

The US dollar gained about 1 percent against the yen this week.

“What really gave the hawkish central banks extra punch was how it seemed to be a coordinated effort to signal a shift away from low-rate policies,” said Joe Manimbo, senior market analyst at Western Union Business Solutions LLC in Washington.

Analysts said Friday’s bounce for the US dollar came as some traders likely took profits.

However, the US dollar on Friday fell against the Canadian dollar and was last at C$1.2971 after touching a nearly 10-month low of C$1.2948 earlier.

“It appears as though the euro and the pound could be testing some resistance levels, and that could also contribute to ... the profit-taking,” said Eric Viloria, currency strategist at Wells Fargo Securities in New York.

Additional reporting by CNA

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