The US dollar shone on Friday, reaching a 19-month high against a basket of currencies as investors preferred the safety of the world’s reserve currency in the wake of worrisome political and economic news outside the US.
The Chinese yuan fell after data showed retail sales last month grew at their slowest pace since 2003 and industrial output rose the least in nearly three years.
The offshore yuan shed 0.38 percent at 6.9038 per US dollar.
The euro weakened as the eurozone economy showed more signs of a slowdown.
Sterling tumbled as traders worried British Prime Minister Theresa May was struggling to secure assurances from the EU over her Brexit withdrawal deal.
“The dollar is not so much rallying as much as everyone else is falling,” said Boris Schlossberg, managing director of foreign-exchange strategy at BK Asset Management in New York.
An index that tracks the greenback versus six major peers hit its highest level since May last year at 97.711, before settling at 97.42, up 0.9 percent for the week.
The greenback’s appeal increased in the aftermath of upbeat data on domestic retail sales and industrial output.
However, its gains were limited by bets that the US Federal Reserve might reduce the number of interest rate increases after a widely expected hike next week.
The futures market implied that traders saw an 82 percent chance that the Fed would increase key short-term rates by a quarter point to 2.25 to 2.50 percent at its policy meeting next on Tuesday and Wednesday, up from 79 percent on Thursday, according to CME Group’s FedWatch program.
“The market is skeptical about the US economy and whether the Fed would hike further after December,” Schlossberg said.
The greenback was also held back by the probability of a partial government shutdown as US President Donald Trump and US lawmakers disagree over funding for a border wall, analysts said.
In Taipei, the New Taiwan dollar fell against the greenback, shedding NT$0.017 to close at NT$30.867, little changed from last week’s NT$30.841.
The euro was down 0.5 percent at US$1.12965 on Friday after German data showed that private-sector expansion slowed to a four-year low this month. The common currency later settled at US$1.13065, down 0.7 percent from last week’s US$1.13833.
French business activity unexpectedly contracted, further fanning fears about slowing growth in the eurozone.
Worries about the European economy were also stoked by uncertainty whether May could convince the British parliament to approve her Brexit deal.
The pound was about 0.8 percent lower at US$1.259, down 1 percent for the week.
Additional reporting by CNA
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