Calay News
On Friday, the US dollar fell from a 2-1/2-month high vs. the Japanese yen and was headed for its biggest weekly loss against a basket of six major currencies since mid-January as traders took a step back to determine the Federal Reserve’s policy course.
Experts claimed that following a recent string of positive US economic data, the market has largely priced in the possibility of a higher terminal fed funds rate.
The 10-year US yield fell from a nearly four-month high close to 4.1%, which gave the yen, which is sensitive to long-term rate differentials between the US and Japan, some hope that its six-week losing run versus the dollar might end.
In the beginning of the week, when it reached a high of 105.36, the dollar index, which gauges the value of the dollar against six important currencies, dropped 0.3% to 104.60, its highest level since January 6. The index has fallen 0.5% so far this week, on pace to have its worst percentage decline since the week of January 15.
Following news that the US services sector expanded steadily in February, with new orders and employment reaching more than one-year highs, the dollar briefly pared its losses. The non-manufacturing index from the Institute for Supply Management (ISM) fell from 55.2 in January to 55.1 this month.
“The dollar has essentially enjoyed four full weeks of gains that completely erased the losses in January,” said Juan Perez, director of trading at Monex USA in Washington.
