Dollar heads for biggest weekly gain in nearly a month
The dollar rose Friday against most major rivals, remaining on track to log its best week in about a month.
The ICE U.S. Dollar Index DXY, +50% a key measure of the dollar’s strength against a basket of six currencies, rose 0.3% to 99.35. For the week, it was looking at a 1.8% advance, which would be its biggest since the week ended March 13, according to FactSet data.
“What had been a consolidation is turning back into a trend of dollar strength once more,” after the release Wednesday of minutes from the Federal Reserve’s March meeting, said Richard Perry, market analyst at Hantec Markets, in a note early Friday.
“There have been some key breaks on major forex pairs that show the dollar bulls are regaining the upper hand. A spike higher in Treasury yields yesterday also backs this assertion,” he added.
The greenback had weakened after dissapointing jobs data last week cast doubt on the strength of the U.S. labor market. A weekly report released Thursday showed the number of Americans seeking first-time unemployment benefits rose, but the four-week average of jobless claims remained at historically low levels, helping reinforce bullish views on rates and boost the dollar.
Market participants are paying close attention to what Fed officials have to say about the state of the economy. Richmond Fed President Jeffrey Lacker is scheduled to speak at 8:30 a.m. Eastern Time in Florida. Lacker is considered one of the most hawkish members of the Fed.
On Friday, the euro EURUSD, -0.69% fell to $1.0612, and slipped to an intraday low of $1.0589. The shared currency bought $1.0660 on Thursday, when it hit a three-week low against the greenback following the strong U.S. jobless-claims report.
The pound GBPUSD, -0.64% fell to $1.4620 from $1.4713 on Thursday. The Office for National Statistics said Friday that overall industrial output in February was slower than expected because of a fall in oil extraction.
Sterling is “getting a little more sensitive to the [U.K. general] election, the result of which still remains very uncertain,” wrote Simon Smith, chief economist at FXPro, in a note early Friday. The U.K. election will be held on May 7.
The dollar was buying 120.26 yen USDJPY, -0.26% versus ¥120.58 on Thursday, when the greenback hit a three-week high against Japan’s currency.
Source: Marketwatch – Dollar heads for biggest weekly gain in nearly a month
