“Tentative market speculation about a pause in the Fed’s tightening cycle in September is surely helping to keep the dollar weak,” ING strategists said.
The dollar index, which measures the greenback against a basket of six major currencies, fell as low as 101.43 for the first time since April 25. In the week, it is marking a loss of 1.3%, its biggest weekly drop since the first week of February.
The dollar hit a nearly two-decade high above 105 earlier this month but has since retreated as US economic data has weakened.
But some analysts were wary of betting on a deeper dollar decline as global markets remain volatile and the end of the month approaches.
“Month-end portfolio rebalancing is expected to provide a boost to the dollar, so I would expect losses to taper off. There is also suspense for next week’s data on US manufacturing and job creation,” he said. Kenneth Broux, currency strategist at Société Générale in London.
The main beneficiary of the dollar’s slide was the euro, but that trend has stalled as investors believe many of the European Central Bank’s expected rate hikes have already been factored into the community currency’s trading.
Against the US currency, the euro rose briefly to its highest level in a month at $1.0765. The British pound was trading higher at $1.2666.
By Saikat Chatterjee of Reuters Agency
Source: Ambito
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