On Friday, the US dollar was on track for its worst week against key rivals since early February, as some of the fervour behind the currency’s rapid 10% rise dissipated.
Investors fleeing to safety amid a sell-off across markets owing to concerns about the impact of rising inflation and Russia’s invasion of Ukraine bolstered the dollar. Meanwhile, the dollar index was on course for a 1.5 percent weekly drop on Friday after advancing in all but two of the previous 14 weeks. The dollar index, which compares the greenback to six major currencies, remained generally steady on the day at 102.92. It hit a new high of 105.01 on Friday, the highest since January 2003.
“While cracks may be forming, we are not persuaded that the fundamentals speak in favor of a more protracted drop for the US dollar at this stage,” currency experts at MUFG wrote in a note. According to the paper, a recent build-up of long dollar bets might assist extend the decline. Other safe-haven currencies have surged as global markets have been under pressure this week. The Swiss franc should rise over 3% against the dollar this week, while the Japanese yen should gain about 1%. The Swiss franc was the last trading at 0.97350 francs, while the yen was trading at 128.205 yens, down 0.2 percent.
The euro has benefited from the dollar’s decline as well and was on course to gain 1.5 percent this week. At $1.05755, it was down 0.1 percent on the day. Sterling remained steady on the day at $1.24805, on track for its greatest weekly increase since December 2020. Bitcoin remained unchanged at little around $30,000 in cryptocurrency, halting severe falls witnessed in previous weeks.
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