The US dollar on Friday posted a second week of gains after a turbulent few days when currencies were buffeted by shifting risk appetite, with the market’s focus on next week’s US Federal Reserve meeting.
However, some analysts wondered whether the US dollar’s recent rally might be losing momentum.
The US dollar index, which measures the greenback against a basket of six major currencies, rose slightly for the day to 92.91. For the week, added 0.2 percent, after rising 0.6 percent previously.
However, that was off a three-and-a-half-month high of 93.194 hit on Wednesday, after strong Wall Street earnings helped investors regain some confidence amid earlier worries that the Delta variant of SARS-CoV-2 could derail the global recovery.
In Taipei, the New Taiwan dollar fell against the greenback, losing NT$0.010 to close at NT$28.028, little changed from last week’s NT$28.005.
Risk appetite among investors remained high on Friday, with US stocks rising, US Treasuries selling off, most commodity currencies well-bid on the day and the greenback off its peaks.
“The dollar looks tired especially after the rally of the last few weeks,” said Erik Nelson, macro strategist at Wells Fargo Securities in New York. “It seems to be running out of steam both from a fundamental and technical perspective.”
So far this month, the US dollar has gained 0.6 percent, after rising 2.8 percent last month.
However, Nelson was not convinced that the dollar could hold its gains in the coming weeks given the decline in US Treasury yields.
Since the beginning of this month, US benchmark 10-year Treasury yields have lost 16 basis points, on track for their largest monthly fall since March last year.
Against the safe-harbor yen, the US dollar rose 0.3 percent to ￥110.53.
The Australian dollar — viewed as a proxy for risk appetite — slid 0.1 percent to US$0.7374, posting a fourth straight weekly loss. With half the Australian population under lockdown, economists said the country’s central bank could increase stimulus rather than decrease it at its next policy meeting.
Additional reporting by CNA, with staff writer
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