Nevertheless, after rising in 12 of the last 14 weeks, the dollar index was headed for a 1.6% weekly decline on Friday.
The dollar index, which compares the greenback to six other currencies, fell 0.1% to 102.82. Last Friday it shot up to a high not seen since January 2003, at 105.01.
Analysts claim that Dollar weakness partly reflects recent drop in inflation-adjusted US Treasury yields, but casts doubt on long-lasting pullback.
“It has raised questions about whether the dollar has really reached exhaustion. But it is too early to say that the dollar has peaked,” said Kenneth Broux, currency strategist at Societe Generale.
The dollar will likely only weaken in the long term if economic strength outside the United States, especially in Europe and China, is shown, Broux said, adding that China’s move to cut a key lending benchmark may help.
The Recent accumulation of long US dollar positions could also weigh on the greenback, currency analysts at MUFG said in a note..
Other safe-haven currencies have risen this week as global equity markets were under pressure, although European stocks recovered some ground on Friday.
The Swiss franc was headed for a weekly gain of more than 3% against the dollar, while the Japanese yen was headed for a weekly gain of almost 1%.
The Swiss franc was up a quarter point at 0.97040 per dollar, while the yen was down 0.2% at 128.060 per dollar.
The euro, which was trading almost unchanged at $1.05875, has also benefited from dollar weakness and was headed for a weekly gain of 1.7%.
Sterling was on track for its biggest weekly gain since December 2020, though it was broadly flat at $1.24810.
As for cryptocurrencies, Bitcoin was flat, just above $30,000, halting the sharp declines of recent weeks.
Source: Ambito
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