Dollar set to snap 5-week win but yen hits lowest in almost 3 years

  • 10/15/2021
  • 00:00
  • 15
  • 0
  • 0
news-picture

TOKYO, Oct 15 (Reuters) - The dollar headed for its first weekly decline versus major peers since the start of last month, falling back from a one-year high as traders turned their attention to when the U.S. Federal Reserve will start raising interest rates. The dollar index , which measures the greenback against six rivals, was little changed at 94.034 on Friday. It is on track for about a 0.1% decline this week despite hitting the highest since Sept. 25 of last year at 94.563 on Tuesday. Improved market sentiment, which has lifted global stocks, commodity prices and bond yields, is also weighing on the safe-haven dollar. Only against the yen - another safe haven - has the dollar managed to maintain the momentum of the past five weeks, rising 0.16% on Friday and touching 113.885 yen for the first time since December of 2018. "We end the week with risk flying," Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a client note. "Equities are going up hard, and the JPY has no place as a hedge," because it would just drag on overall portfolio performance, Weston said. The greenback had rallied since early September on expectations the U.S. central bank would tighten monetary policy more quickly than previously expected amid an improving economy and surging energy prices. Minutes of the Fed"s September meeting confirmed this week that a tapering of stimulus is all but certain to start this year, although policymakers are sharply divided over inflation and what they should do about it. read more Money markets are currently pricing in about 50/50 odds of a 25 basis point rate hike by July. The dollar index is "looking a little shaky, but any slippage should prove modest" with Fed tapering now imminent, Westpac strategists wrote in a client note. Any dips in the index should be limited to 93.70, they said. The next major test of the U.S. economy"s health comes later on Friday with the release of retail sales figures. The euro slipped 0.09% to $1.1588 after touching $1.1624 on Thursday for the first time since Sept. 4. Sterling was little changed at $1.36705 following its climb to the highest since Sept. 24 at $1.3734 overnight. The risk-sensitive Aussie dollar edged down 0.07% to $0.74105, after reaching a more than one-month high of $0.74265 in the previous session. New Zealand"s kiwi dollar lost 0.06% to $0.7033, holding most of Thursday"s 1% surge, which took it to the highest since Sept. 24 at $0.70415. In cryptocurrencies, bitcoin held around $57,200 after touching a five-month high of $58,550 on Thursday. Smaller rival ether traded at around $3,780, still close to a more than one-month high of $3,825.89 reached overnight.

مشاركة :