Against a basket of currencies, the dollar rose to its highest levels since September 2002, above 109, before retreating to trade at 108.3, down 0.2% on the day.
U.S. banking earnings season started on a weak note, China’s second-quarter growth sank more than expected, Italy faces a new political crisis, and Federal Reserve officials remain aggressive.
“With US rate hikes likely to accelerate and the ECB stuck in neutral in the face of a sharp European economic slowdown, the market has not yet given up on the idea of a (euro) breakout to the downside. next key support around 0.96,” said John Hardy, chief currency strategist at Saxo Bank.
The greenback was headed for its third straight week of gains as traders increased bets that the Federal Reserve will lean toward aggressive tightening at its July 26-27 meeting after data showed inflation at The United States accelerated at the fastest pace in four decades.
The euro rose to $1.0053, having dipped below par on Thursday after Italian Prime Minister Mario Draghi offered his resignation, which was rejected by the country’s president.
The Chinese yuan hit a two-month low against the dollar and looked set to suffer its biggest weekly drop since May as weak data raised questions about this year’s economic growth target.
Source: Ambito
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