Dollar gains after steep losses, but downtrend stays intact

July 15, 2023 / 5:23 PM
Sharjah 24 – Reuters: The US dollar bounced on Friday after falling sharply the last few days, as investors consolidated losses ahead of the weekend, but its trajectory remained tilted to the downside with the Federal Reserve thought near the end of its rate hike cycle amid softening inflation.
According to Reuters, it was still on track for its biggest weekly decline since November against a basket of six major currencies.

The dollar index edged up 0. %2 to 99.923, after touching a 15-month low of 99.574 earlier. The index was down 2.3% for the week.

The weekly decline was exacerbated by June US producer and consumer inflation data that showed easing price pressures.

US producer prices barely rose last month and the annual increase was the smallest in nearly three years, data showed on Thursday, a day after a report indicated that consumer prices gained modestly last month.

Markets are still pricing in a 95% chance of a 25-basis Investors have been betting on a turn lower in the dollar for months, with short positions more than doubling over the month to July 7, according to data from Commodity Futures Trading Commission, although they remain far off the levels in 2021.

Against a weakening dollar, the euro touched a 16-month peak of $1.1245 in Asian hours before flattening at $1.1229.

Versus the Swiss franc, the dollar gained 0.4% to 0.8621 francs, rising from an eight-year low of 0.8568. The dollar was on pace for its largest weekly percentage loss versus the franc since December last year.

The dollar rose 0.5% to 138.805 yen , but was on course for its worst week since January.

The Swedish crown fell 0.5% against the greenback to 10.2395 per dollar, moving away from a two-month high hit on Thursday, on data showing consumer inflation is decelerating at a slower pace than expected. The Swedish currency is still set for its biggest weekly gain since March 2009, up 5.2%.

Elsewhere, the Australian dollar eased 0.8% to US$0.6837 after Michele Bullock was appointed head of Australia's central bank on Friday, becoming its first female governor as it undertakes a sweeping reorganisation.

July 15, 2023 / 5:23 PM

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