Dollar snaps three-day losing run as selling pressures ease, sheds 0.6% in the week

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On Friday, the US Dollar Index (DXY) measured against a basket of six major currencies on an average had closed out the session 0.32 per cent higher to 95.05, though, the greenback had rounded off the week about 0.6 per cent lower, marking off its worst weekly percentage decline since early-September.

In point of fact, in the day’s upswing in US Dollar Index that snapped a three-session long losing streak, came forth as investors appeared to be showing an upscaled caution with a number of US Fed policymakers had shown strong intent to an earlier-than-anticipated rate hike in a bid to tame a tormenting inflation-surge.

Besides, as market participants remained utterly wary on latest development of US Fed’s view on monetary policy, the greenback had restored its safe-haven status with a number of investors across the globe eschewing riskier assets.

If truth is to be told, the greenback which had added more than 6 per cent last year, had been met with a mass-scale sell-off pressure since Fed Chair Powell’s testimony in a Congressional hearing, while the Fed Chair had voiced an ultra-dovish tone and dwarfed investors’ optimism, though, hawkish remarks from a number of Fed policymaker including Governor candidate Lael Bernard, had changed the market complexion on Friday.

US Dollar gains, but ends week lower

Citing statistics, in the day’s FX market wind-down, the US Dollar Index (DXY) measured against a basket of six major currencies, added 0.3 per cent to 95.05, however, had shed 0.6 per cent over the week.

Besides, the bloc’s common currency euro shed 0.34 per cent to $1.1416 against its American counterpart, while British pound lost 0.20 per cent to $1.3677. Risk-sensitive loonies such as Australian Dollar lost as much as 1.0 per cent to $0.7208 against the greenback, while safe-haven Japanese Yen added 0.02 per cent to 114.20 yen per dollar.

Meanwhile, addressing to investors’ uncertainty about the US Fed’s monetary policy, a Scotiabank foreign exchange strategist wrote in a client note, “Investors appear to be taking the view that the USD has peaked and that Fed tightening moves are priced in and the likes of the euro offer better potential returns down the road”.