Dollar set to snap 5-week win but yen hits lowest in almost 3 years

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An worker counts U.S. greenback payments at a cash trade in central Cairo, Egypt, March 20, 2019. REUTERS/Mohamed Abd El Ghany./File Picture

  • Fed fee hikes in focus as greenback retreats from 1-yr excessive
  • Improved threat urge for food hurts safe-haven yen and greenback
  • Threat-sensitive Aussie trades close to one-month excessive
  • U.S. retail gross sales on Friday to be subsequent take a look at for greenback

TOKYO, Oct 15 (Reuters) – The greenback headed for its first weekly decline versus main friends for the reason that begin of final month, falling again from a one-year excessive as merchants turned their consideration to when the U.S. Federal Reserve will begin elevating rates of interest.

The greenback index , which measures the buck in opposition to six rivals, was little modified at 94.034 on Friday. It’s on monitor for a few 0.1% decline this week regardless of hitting the best since Sept. 25 of final yr at 94.563 on Tuesday.

Improved market sentiment, which has lifted world shares, commodity costs and bond yields, can also be weighing on the safe-haven greenback.

Solely in opposition to the yen – one other secure haven – has the greenback managed to keep up the momentum of the previous 5 weeks, rising 0.16% on Friday and touching 113.885 yen for the primary time since December of 2018.

“We finish the week with threat flying,” Chris Weston, head of analysis at brokerage Pepperstone in Melbourne, wrote in a consumer observe.

“Equities are going up onerous, and the JPY has no place as a hedge,” as a result of it will simply drag on general portfolio efficiency, Weston mentioned.

The buck had rallied since early September on expectations the U.S. central financial institution would tighten financial coverage extra rapidly than beforehand anticipated amid an bettering financial system and surging power costs.

Minutes of the Fed’s September assembly confirmed this week {that a} tapering of stimulus is all however sure to start out this yr, though policymakers are sharply divided over inflation and what they need to do about it.

Cash markets are at the moment pricing in about 50/50 odds of a 25 foundation level fee hike by July.

The greenback index is “trying a bit of shaky, however any slippage ought to show modest” with Fed tapering now imminent, Westpac strategists wrote in a consumer observe.

Any dips within the index must be restricted to 93.70, they mentioned.

The following main take a look at of the U.S. financial system’s well being comes in a while Friday with the discharge of retail gross sales figures.

The euro slipped 0.09% to $1.1588 after touching $1.1624 on Thursday for the primary time since Sept. 4.

Sterling was little modified at $1.36705 following its climb to the best since Sept. 24 at $1.3734 in a single day.

The chance-sensitive Aussie greenback edged down 0.07% to $0.74105, after reaching a greater than one-month excessive of $0.74265 within the earlier session.

New Zealand’s kiwi greenback misplaced 0.06% to $0.7033, holding most of Thursday’s 1% surge, which took it to the best since Sept. 24 at $0.70415.

In cryptocurrencies, bitcoin held round $57,200 after touching a five-month excessive of $58,550 on Thursday.

Smaller rival ether traded at round $3,780, nonetheless near a greater than one-month excessive of $3,825.89 reached in a single day.

Reporting by Kevin Buckland; Enhancing by Muralikumar Anantharaman


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