Sun, Jan 28, 2018 - Page 14 News List

Greenback suffers worst weekly fall since June 2017

Reuters, NEW YORK

The US dollar remained weak against a basket of currencies on Friday, bruised by comments by senior US officials this week backing a weak US dollar, and capped its worst weekly fall since June last year.

The US dollar index, which measures the greenback against a basket of six major currencies, was down 0.33 percent at 89.1 and posted a weekly fall of 1.6 percent.

US President Donald Trump’s comments on Thursday that he wanted a “strong dollar,” a day after US Secretary of the Treasury Steven Mnuchin said a weaker greenback would help US trade balances in the short term, failed to put a lid on volatility and keep US dollar bears in check.

The euro on Friday rose 0.15 percent against the greenback to US$1.2413, after hitting a more than three-year high of US$1.2536 on Thursday. The common currency is up 1.6 against the US dollar for the week.

“US$1.25 in euro-dollar is a critical level and it’s got a lot of sticker shock associated with it,” said Greg Anderson, global head of foreign-exchange strategy at BMO Capital Markets.

“There were probably a lot of options barriers and lots of stops up there that people would love to take out. You would expect to see an acceleration in volatility,” he said.

UBS Wealth Management on Friday upgraded its six-month forecasts for the euro from US$1.22 to US$1.28.

In Taipei, the New Taiwan dollar fell NT$0.032 against the US dollar to close at NT$29.101. For the week, the NT dollar rose NT$0.329, or 1.12, against the greenback on the back of foreign fund inflows.

Data showing US fourth-quarter GDP increased at a 2.6 percent annual rate, held back by a modest pace of inventory accumulation, had little effect on the greenback.

Economists polled by Reuters had forecast a 3 percent increase.

“The disappointing print surprised market participants who had expected a number exceeding 3 percent in the October-to-December time period — but on a full-year basis, the [US] economy’s stellar growth performance remains largely intact.” Karl Schamotta, director of global product and market strategy at Cambridge Global Payments, said in a note.

The US dollar slipped to four-and-a-half-month low against the Japanese yen after Bank of Japan Governor Haruhiko Kuroda said the bank expects the economy to continue growing at a moderate pace and inflationary expectations are picking up slightly.

The US dollar fetched ¥109.20 in Tokyo afternoon trade, down from ¥109.44 in New York, but still slightly up from levels below ¥109 earlier Thursday in Asia.

The British pound edged higher further against the US dollar.

Additional reporting by AP and CNA

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