This Friday June 9, the dollar experienced a rebound after reaching two week minimumswhich helped to mitigate theto weakness that June had shown due to rising expectations that the Federal Reserve does not raise rates interest in the short term.
Next week will be crucial in terms of monetary policysince meetings of the Federal Reservehe European Central Bank and the Bank of Japan.
On the other hand, on the eve it was known an increase in applications for unemployment benefits in the US, which reached their highest level in more than a year and a half last week. This caused a drop of 0.8% on the dollar index, which represents the largest daily reduction since the outbreak of the banking crisis area in March.
About the dollar index
Regarding the dollar indexwhich compares the US dollar to six other major currenciesthe greenback records a 0.6% drop for the week, marking its biggest weekly drop since mid-March, when fears related to the health of the banking sector rocked the markets. However, during the day it showed an improvement of 0.2%.
David Stritcha strategist at CaxtonFX, commented: “This increase in jobless claims, whiche is near its highest level in two yearswas interpreted by the markets as a clear sign of upcoming weakness in the US economy and of a more cautious stance by the Federal Reserve in terms of raising interest rates.
He also added: “The question now is if this data is an isolated event and the market has simply overinterpreted itor if it is the first warning sign that the US economy could be weaker than initially expected.”
As for other currencies, the euro showed a decrease of 0.2% against the dollar, sitting at $1.0762 and retreating from the two-week high reached on Thursday. The pound sterling, which had improved almost a 1% in the previous session, it held steady at $1.2546, near a one-month high.
Finally, the dollar rose 0.46% against the yen, reaching 139.55 unitsafter the governor of the Bank of Japan, Kazuo Ueda, reaffirmed the determination to maintain an ultra-loose monetary policy.
Source: Ambito
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