The US dollar on Friday fell to a one-week low against a basket of currencies, after a survey showed US consumer sentiment dropped sharply early this month to its lowest level in a decade.
The University of Michigan said its preliminary consumer sentiment index fell to 70.2 in the first half of this month from a final reading of 81.2 last month.
That was the lowest level since 2011 and one of the six largest drops in the past 50 years of the survey.
Investors this week have been treated to a mixed bag of data. While US producer prices data released on Thursday showed surging prices, bolstering the case for the US Federal Reserve to remove some of its stimulus, it followed US consumer price data on Wednesday that indicated inflation might be peaking, potentially giving the Fed room to remain accommodative for longer.
“The prime driver this week was this idea that a deceleration in inflation pressures will reduce the impetus for an earlier tapering of Federal Reserve asset purchases,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
“What’s happened here is traders have moved their expectation for a tapering announcement from September toward November, perhaps even December,” Schamotta said.
The US dollar index, which measures the greenback against a basket of six currencies, was 0.55 percent lower at 92.52, its lowest since Friday last week. It posted a weekly drop of 0.3 percent.
Traders continue to look toward the Fed’s central banking conference in Jackson Hole, Wyoming, later this month, for clues to the Fed’s next move.
“[Fed Chairman Jerome] Powell may use the Jackson Hole platform to provide further clarity on the sequencing of the Fed’s monetary tightening operations — making it clear that a tapering announcement, when it comes, will not act as a temporal anchor for changes in the Fed funds rate,” Schamotta said.
“The goal is to tame a possible taper tantrum before it gets started,” he said.
In Taipei, the New Taiwan dollar declined against the US dollar, losing NT$0.041 to close at NT$27.860, down 0.17 percent from a week earlier.
Sterling was 0.43 percent higher against the broadly weaker US dollar, but posted a second straight week of modest declines as investors look for fresh catalysts for the British currency’s next move after the UK’s growth figures for the second quarter came in as expected.
Elsewhere, bitcoin climbed 4.624 percent to US$46,500, nearing Wednesday’s three-month peak of US$46,787, while Ethereum rose 5.81 percent to US$3,221.52.
Additional reporting by CNA, with staff writer
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