The US dollar on Friday posted its best weekly performance in more than seven months after strong US retail sales and producer prices data for last month reinforced expectations the US Federal Reserve would raise interest rates in December.
The US currency briefly trimmed gains versus the Japanese yen and euro after Fed Chair Janet Yellen said the US central bank might need to run a “high-pressure” economy to reverse damage from the last financial crisis.
Her view of the economy did not alter expectations for a December rate hike, analysts said.
“Yellen’s comments were more about the Fed looking down the road and her concerns about the last financial crisis shed light on why the Fed has been so hesitant to raise interest rates,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The US dollar index, which tracks the greenback against a basket of six major currencies, added 0.57 percent to 98.069 and is up 1.5 percent for the week.
Against the yen, the US dollar on Friday rose 0.44 percent to ￥104.14. The US currency has rallied for three straight weeks versus the yen in the longest stretch of gains since May.
In Taipei, the New Taiwan dollar on Friday rose against the US dollar, gaining NT$0.088 to close at NT$31.672, reflecting a rebound staged by other regional currencies after a recent slump, dealers said.
The NT dollar this week fell 0.6 percent, or NT$0.192, against the US dollar from last week’s NT$31.480.
The euro fell 0.77 percent against the greenback to US$1.0971. It is down 1.6 percent for the week, its worst weekly performance since late February.
Swiss franc fell versus the US dollar after risk sentiment got a boost from Chinese data showing producer prices rose for the first time in about five years. That boded well for the global economy, which has been battling the threat of deflation in recent months.
The US retail sales data, which showed a 0.6 percent rise last month after declining 0.2 percent in August, supported the US dollar’s gains.
Other data on Friday suggested a pickup in inflation, with producer prices rising broadly last month to record their biggest year-on-year increase since December 2014.
The minutes of the latest Fed meeting last month, released on Wednesday, prompted investors to raise their bets of a US rate increase in December, to a 70 percent chance.
The Russian ruble retreated for the first week in four as the second-best forecaster of the currency said speculation the US will increase rates by the end of the year was crimping appetite for the nation’s assets.
The currency was steady at 62.9725 by 5:38pm in Moscow on Friday, heading for a 1.2 percent depreciation in the week.
The Thai baht climbed 0.8 percent, taking its two-day gain to 1.1 percent.
It is still down 1.1 percent for the week as Thailand mourns the death of its 88-year-old monarch, a unifying force in a nation which has seen 10 coups during his seven-decade reign.
South Africa’s rand lost 3.1 percent this week against the US dollar.
Additional reporting by Bloomberg
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