“Perhaps investors have had enough of the dollar and are looking to spread risk, especially as this broad-based boost from rising US bond yields appears to have peaked,” said Shaun Osborne, chief currency strategist at Scotia Bank.
The dollar index, which measures the greenback against a basket of six currency pairs, lost 1% to 102.79 units, its lowest level since May 5.
The index hit a nearly two-decade high last week amid the Federal Reserve’s tightening monetary policy tone and growing concern about the state of the global economy. The benchmark has an accumulated gain of 7.5% so far this year.
On Thursday, the dollar fell to a three-week low against the Japanese currency and a two-week low against the Swiss franc but some analysts had said the dollar’s trend should not be expected to reverse.
“Yes, the dollar is falling broadly today despite risky conditions, but this doesn’t mean its safe-haven status is going to start to weaken,” said Simon Harvey, an analyst at Monex Europe.
Among other currencies, the euro rose to a one-week high against the dollaras investors incorporated into their operations the possibility that the European Central Bank would adopt a more aggressive stance in the short term.
Source: Ambito
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