The US dollar rose against a basket of currencies on Friday, boosted by encouraging US manufacturing data, but posted a weekly loss as traders’ concerns over the tap talk in the US Federal Reserve minutes moderated .
The US dollar has restored much of the advance it made after a mention in the minutes of the Fed’s monetary policy meeting last month of possible talks on reducing the stimulus measures that spawned the hope that US interest rate hikes could come sooner than previously thought.
“Concerns about cutting emissions faded pretty quickly, it seems,” wrote Scotiabank chief currency strategist Shaun Osborne.
The US currency found some support after data showed US factory activity picked up at the start of the month amid strong domestic demand.
The dollar index, measuring the greenback against a basket of six currencies, was 0.25% higher at 90.03.
The index, which hit a four-month low earlier in the session, fell 0.32% for the week.
Some strategists still doubt the Fed will rush to pull out of its accommodative stance.
“We continue to expect the USD to remain weak while US yields remain contained,” Osborne wrote.
Still, the continued improvement in US data, especially against Europe, is likely to strengthen the greenback’s bullish case, other analysts said.
“The last flash [purchasing managers’ indices] reinforce our view that the economy will continue to grow at a faster rate in the United States than in the Eurozone over the next several years, ”said Simona Gambarini, Capital Economics Market Economist.
“This feeds into our forecast that long-term yields will rise faster in the former than in the latter, and that the euro will fall back against the US dollar,” Gambarini said.
The New Taiwan Dollar rose against the US dollar, gaining NT $ 0.072 to close at NT $ 27.94, up 0.26% from NT $ 28.012 a week earlier. Turnover totaled 1.079 billion US dollars during the trading session.
An easing of COVID-19 restrictions helped investigations into German service activity and French trade activity better than expected this month, although they had little effect on the euro on Friday .
The British pound fell 0.27%, but posted its third straight week of gains against the US dollar, helped by a series of data releases bolstering market expectations for a strong economic recovery in the UK.
CNA Supplementary Reports, with Staff Writer
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