The currency rebounded and cut the losses generated on Thursday by the rate cut announced by the Federal Reserve.
He global dollar closed with gains a volatile week in which markets weighed the impact of Donald Trump’s return to office White House and prospects for future rate cuts United States Federal Reserve (Fed).
The US dollar had lost ground in the previous session as traders closed profitable bets on a Trump presidency following his election victory. “We need more clarity on US policies,” said Athanasios Vamvakidis, global head of foreign exchange strategy at Bank of America (BofA). “Until then, the dollar will be governed by data and expectations about the path of Fed easing“he added, arguing that tariffs and tax cuts could be positive for the currency in the short term, but harmful in the long term.
The dollar index, which compares the currency with six other competitors, improved 0.5% this Friday to 105.03, gaining 0.63% during the week, Reuters reported.
Meanwhile, the euro fell 0.85% to $1.0712 and was on track for a 1.12% drop over the week, which saw the collapse of Germany’s coalition government on Wednesday.
In front of yen, he dollar fell 0.13% to 152.73 yen. The Japanese currency is expected to suffer as the interest rate differential with the United States widens, which could prompt Japan’s central bank to raise rates in December to prevent the currency from falling back toward three-decade lows. .
He chinese yuan weakened after Beijing will unveil a 10 trillion yuan ($1.4 trillion) debt package on Friday to ease local governments’ financial strains and stabilize flagging economic growth.
“Markets may have been waiting for a bigger stimulus than expected,” he told Reuters. Lynn Song, chief economist for Greater China at ING.
Source: Ambito
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