Dollar edges lower; weekly loss looms on dovish Fed

Dollar edges lower; weekly loss looms on dovish Fed
Dollar edges lower; weekly loss looms on dovish Fed
© Reuters

By Peter Nurse – The U.S. dollar edged lower in early European trade Friday, on course to post a weekly loss on dovish signals from the Federal Reserve.

At 02:55 ET (07:55 GMT), the , which tracks the greenback against a basket of six other currencies, fell 0.1% to 105.840, down more than 1% for the week and close to its three-month low of 105.30 hit last week. 

The dollar has struggled of late as expectations of a less aggressive pace of U.S. monetary tightening as soon as next month saw U.S. Treasury yields sink to seven-week lows earlier Friday.

“The Fed minutes surprised on the dovish side, signaling strong support for slower rate hikes and weaker support for Powell’s higher-for-longer rhetoric,” said analysts at ING, in a note. “The dollar could stay pressured for a bit longer, but it’s probably embedding a good deal of Fed-related negatives now.” 

Activity is likely to be limited Friday, with traders taking advantage of Thursday’s U.S. Thanksgiving holiday to enjoy a long weekend, and attention will quickly shift to next week and the release of U.S. and data for interest rate implications.

rose 0.1% to 1.0418, approaching the four-month high of 1.0481 hit last week, helped by data showing Germany’s economy grew by a little more than initially thought in the third quarter.

expanded by 0.4%, rather than the 0.3% reported in its first reading. That left up 1.2% from a year earlier, rather than the 1.1% in the first reading. 

Additionally, market research firm GfK said posted a second straight improvement for December, while remaining close to an all-time low at -40.2.

fell 0.2% lower to 1.2087, but is still close to the three-month high of 1.2153 hit in the previous session with the pair on track for a near 2% weekly gain.

rose 0.2% to 138.81, after data showed reached a 40-year high in November, heralding more inflationary pressures for the country.

The risk-sensitive rose 0.1% to 0.6765, slipped 0.1% to 0.6257, while rose 0.1% to 7.1574 with the yuan weakening as the Chinese economy struggles with a record-high jump in daily COVID-19 cases, which saw the reintroduction of strict curbs in several major cities.




Leave a Reply

Your email address will not be published. Required fields are marked *

New Brokers
2.8 rating
Buy & sell Crypto in minutes
3.0 rating
Note: Investing involves risks. You can lose your deposit. We advise you to only invest in financial products which match your knowledge and experience.
2.0 rating
Interactive Brokers attracts active traders with low per-share pricing, an advanced trading platform.
4.3 rating
eToro is the world’s leading social trading platform, with thousands of options for traders and investors.
Risk Warning: The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory or other services by AdonFinance. In addition, the content of the website offers no opinion with respect to the suitability of any security or any specific investment. Trading foreign exchange, stocks, cryptocurrencies and commodities is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against traders. Before any investment with any broker you need to carefully consider your targets, previous experience, and risk level. Forex trading can result in the loss of your money, as a result, you are expressly cautioned that you should never invest or trade with money that you cannot afford to lose. For the avoidance of doubt, AdonFinance's service provides Brokers reviews in the Financial market. AdonFinance, its subsidiaries, agents or affiliates will assume no responsibility whatsoever for your trading activity. © Copyright 2021 AdonFinance