LONDON/NEW YORK (Businesshala) – The US dollar lost some ground on Friday as high inflation wreaked havoc on consumer sentiment, but the greenback posted its third straight weekly gain after a surprisingly strong US inflation print hit markets on Wednesday. was on track for. Investors will step up their bets for a hike in US rates.
The dollar turned red on Friday morning when a University of Michigan survey showed a decline in US consumer sentiment in early November to its lowest level in a decade as inflation cut into the standard of living of households, leading some policymakers to believe. Adequate steps are being taken to reduce it. Problem.
With the short-dated US Treasury yield higher – five-year bond yields hit a February 2020 high – investors were betting this week that US policymakers would be forced to raise interest rates sooner than later. Will go [US/]
Against a basket of its rivals, the dollar index was down 0.06% at 95.0960 at 10:41 a.m. EST (1541 GMT), having fallen to a low of 94.991 following consumer sentiment news. Earlier in the session, it had reached its highest level since July 2020.
“Consumers are clearly more concerned about real income growth because inflation is higher than wages for now, and that’s weighing on sentiment,” said Wells Fargo macro strategist Eric Nelson.
“This is feeding growth concerns for the dollar and undermining it against most currencies, especially the Japanese yen as US yields declined.”
The dollar was down 0.16% at 113.87 yen after falling as low as 113.77.
Currency markets have been shaken since Wednesday, when data last month showed US consumer prices rose at the fastest annual pace since 1990, casting doubt on the Federal Reserve’s argument that price pressure would be fleeting.
Renewed strength in the dollar earlier in the week infused new life into ailing currency volatility markets, as traders scramble to buy options to protect themselves against the strengthening of the dollar. The currency volatility index hit a new six-month high on Friday.
Markets were pricing in the high probability of the first rate hike by July and the second by November. CME data suggests a 50% chance of a rate hike by then, compared to less than 30% a month ago.
The euro was down 0.03% at $1.1446, having fallen to a nearly 16-month low of $1.1433 earlier.
Investors are increasingly bearish on the single currency outlook as the European Central Bank is unlikely to change its extremely sluggish policy settings in the near term against the backdrop of a slowing economy.
Sterling bulls found some respite on Friday as GBP/USD rebounded after hitting new 2021 lows, although the rise may only provide temporary solace as technical and fundamental factors point to further downside.
Sterling was up 0.33% against the dollar. It gained ground in the late morning after the dollar weakened and the EU said it was committed to coming to an agreement with the UK regarding Northern Ireland.
The risk-sensitive Australian dollar rose 0.37% to $0.7318 after falling to $0.7277 for the first time in more than a month.
In crypto, bitcoin was down 2.3% at $63,324.12 from a record high of $69,000 earlier in the week.
Currency Bid Price at 10:41 am (1541 GMT)
Details RIC Last US Close PCT Change YTD PCT High Bid Low Bid
Dollar Index 95.0960 95.1630 -0.06% 5.685% +95.2660 +94.9910
EUR/dollar $1.1446 $1.1450 -0.03% -6.32% +$1.1462 +$1.1433
Dollar / Yen 113.8700 114.0600 -0.16% + 10.21% +114.3000 +113.7700
Euro/Yen 130.32 130.58 -0.20% +2.68% +130.7600 +130.2400
Dollar/Swiss 0.9218 0.9210 +0.11% +4.22% +0.9238 +0.9207
Sterling/Dollar $1.3406 $1.3363 +0.33% -1.87% +$1.3424 +$1.3354
Dollar/Canadian 1.2556 1.2582 -0.21% -1.40% +1.2604 +1.2547
Australian/Dollar $0.7318 $0.7291 +0.37% -4.87% +$0.7321 +$0.7277
Euro/Swiss 1.0549 1.0544 +0.05% -2.39% +1.0572 +1.0544
Euro/Sterling 0.8535 0.8560 -0.29% -4.50% +0.8568 +0.8535
New Zealand $0.7040 $0.7022 +0.23% -1.99% +$0.7041 +$0.6997
Dollar/Norway 8.6840 8.6805 +0.16% +1.25% +8.7085 +8.6775
Euro/Norway 9.9420 9.9347 +0.07% -5.02% +9.9611 +9.9230
Dollar/Sweden 8.7431 8.6959 +0.29% +6.67% +8.7586 +8.6918
Euro/Sweden 10.0070 9.9776 +0.29% -0.69% +0.0166 +9.9703