The US dollar on Friday gained slightly and posting its largest weekly gain in more than a month as investors eyed rising bond yields and continued to make bets on the US Federal Reserve’s interest rate hiking path.
The US currency gained steam as the session wore on and was up against the euro and the yen, but was down slightly against sterling, which regained some lost ground after a volatile session on Thursday following the release of Britain’s budget.
In the US on Thursday, investors had reacted to hawkish policymaker comments with St Louis Fed President James Bullard saying that even under a “generous” analysis of monetary policy, the Fed needs to keep raising rates as its tightening so far “had only limited effects on observed inflation.”
Photo: Reuters
The euro was down 0.39 percent against the US dollar at US$1.0326 after earlier rising as much as 0.29 percent. The pound pared gains against the greenback and rose 0.19 percent to US$1.1888 after earlier gaining as much as 0.7 percent.
Both the euro and sterling had hit multi-month highs against the US dollar earlier this week after inflation data showed an easing in US price pressures.
Joseph Trevisani, senior analyst at FXStreet, pointed to hawkish remarks from Fed officials such as Bullard which “helped to thwart speculation that the Fed was nearing a pause” in its campaign against inflation, and set the stage for gains in the US dollar along with US Treasury yields.
“A two-day recovery in US Treasury rates has given the dollar a modest improvement after last week’s sharp inflation driven sell-off,” Trevisani said.
Some analysts also said that investors might be positioning for the year-end after the US dollar’s strong run so far this year.
Against the yen, the dollar was up 0.13 percent at ￥140.39.
The New Taiwan dollar shrank against the US dollar, losing NT$0.012 to close at NT$31.170, but gained 0.76 percent from NT$31.410 a week earlier.
The US dollar index, which measures the greenback against a basket of major currencies, was up 0.26 percent at 106.97 after falling 0.33 percent earlier in the day.
The index was up 0.64 percent on the week — its biggest weekly gain since early October.
Additional reporting by CNA, with staff writer
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