The US Dollar Index (DXY) measured against a basket of six major currencies on an average inched higher on Friday, paring some of its earlier losses, as a rise in US Treasury bond notes alongside China’s inflation gauges had propelled the greenback higher, however, the American Dollar Index still had botched to avert its worst weekly percentage decline this year thus far, snapping up a latest leg of three straight week of gains.
In point of fact, Friday’s marginal gain in US Dollar Index was largely catapulted by an inexplicable combination of a rise in US inflation indicators alongside the US Fed’s dovish policy stance amid expectations that a latest uptick in inflation indicators would likely to be short-lived due to a slack in labour market.
Economic data released on Friday, in tandem, had revealed that the US Producers Prices Index, a closely observed indicator to US inflation, had reported the largest annual gain in more than 9-1/2 years, which bode well for the US Dollar in light of a dovish policy stance from the US Fed that said earlier in the week on latest FOMC Minutes’ report that a majority of policymaker had pledged to an accommodative stance until a full-fledged recovery in labour market.
Nonetheless, a lion’s share of Wall St. analysts and economists still believe that a plausible inflation-surge in a near term would unlikely to sustain.
US Dollar edges higher, but reports steepest weekly plunge this year
Citing statistics, on Friday’s FX market wind down, the US Dollar Index measured against a basket of six major currencies on an average rose 0.12 per cent to 92.18, while over the week, the US Dollar Index dwindled as much as 0.89 per cent, marking up the worst weekly plunge this year thus far.
Apart from that, commodity-linked currencies like of Australian Dollar, shed as much as 0.9 per cent despite upbeat manufacturing data from China following reveal of a dovish policy stance from the Australian Central Bank.
Meanwhile, adding that a latest round of US Dollar rally might have run out of steams, a head of FX Strategy at Societe Generale, Kit Juckes, said on late-afternoon US trading hours, “In short, the energy has gone out of the dollar’s first-quarter rebound, just as it has gone out of the bond sell-off. ”