The U.S. dollar demonstrated its strength on Friday as traders prepared for U.S. inflation data that could secure the course of interest rate rises in the future. Another major currency, the Chinese yuan strengthened its position after a big tumble in the previous session.
The euro fell 0.4% on Thursday. The single currency stood at $1.129 not far from its 2021 low of $1.1186.
The dollar index reached 96.255 and was headed on track for its seventh consecutive weekly rise ahead of the inflation data. Besides, U.S. consumer confidence data is also due on Friday, and if it holds up could indicate more price pressures ahead.
The Federal Reserve Bank, European Central Bank, Bank of England as well as Bank of Japan all meet next week.
Vaccine makers and authorities are working hard to learn more about the Omicron variant of Covid-19. They are ready to do whatever they can to tackle the Omicron variant.
The pandemic already created numerous issues, so central banks are closely monitoring the Omicron variant and its impact on the economy.
On Thursday, China’s yuan declined in onshore and offshore markets due to the central bank’s decision. The country’s central bank raised FX reserve requirements for the second time since June. On the next day, the yuan rose to 6.3650 per dollar. The country’s offshore currency traded at 6.3717 after rising to 6.33 before Thursday’s tumble, its best result since May 2018.
The yen fell slightly to 113.58 per dollar.
The British pound meanwhile dropped 0.1% to $1.3214. The pound stood not far from the 2021 low of $1.3161. The country’s currency suffered losses as a strong dollar rattled more G10 currencies. The U.K.’s decision to introduce new restrictions also affected the pound.
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