The US dollar on Friday rose against a basket of currencies, boosted by encouraging US manufacturing data, but posted a weekly loss as traders’ concerns about taper talk in US Federal Reserve minutes moderated.
The US dollar has given back much of the advance it made after a mention in minutes from the Fed’s monetary policy meeting last month of possible discussions on paring back stimulus raised hopes that US interest rate increases might come earlier than previously thought.
“Taper concerns have faded rather quickly, it would seem,” Scotiabank chief currency strategist Shaun Osborne wrote in a note.
Photo: Reuters
The US currency found some support after data showed US factory activity gathered speed early this month amid strong domestic demand.
The dollar index, measuring the greenback against a basket of six currencies, was 0.25 percent higher at 90.03.
The index, which hit a four-month low earlier in the session, declined 0.32 percent for the week.
Some strategists remain doubtful that the Fed will rush to pull back from its accommodative stance.
“We continue to expect the USD to remain soft while US yields remain contained,” Osborne wrote.
Still, continued improvement in US data, especially relative to Europe, is likely to bolster the bull case for the greenback, other analysts said.
“The latest flash [purchasing managers’ indices] reinforce our view that the economy will continue to grow at a faster pace in the US than in the eurozone in the next few years,” Capital Economics markets economist Simona Gambarini said.
“This feeds into our forecast that long-dated yields will rise more rapidly in the former than in the latter, and that the euro will fall back against the US dollar,” Gambarini said
The New Taiwan dollar rose against the US dollar, gaining NT$0.072 to close at NT$27.94, up 0.26 percent from NT$28.012 a week earlier. Turnover totaled US$1.079 billion during the trading session.
A loosening of COVID-19 restrictions helped surveys of German services activity and French business activity come in better than expected this month, although they had little effect on the euro on Friday.
The British pound fell 0.27 percent, but posted its third consecutive week of gains against the US dollar, helped by a series of data releases reinforcing market expectations for a strong economic recovery in the UK.
Additional reporting by CNA, with staff writer
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