The Dollar Is Hovering Near a Three-Month Low

Investors’ concerns over the possibility of the Federal Reserve slowing the tightening of monetary policy as early as December caused the U.S. dollar to edge up slightly on Friday but to remain close to a three-month low and on track for a weekly loss.

After the GfK institute survey revealed on Friday that German consumer sentiment should stabilize next month due to energy measures, the euro had weekly gains.

The U.S. dollar index rose 0.2 percent to 106.06 against a basket of currencies after lower trade on Thursday due to the U.S. Thanksgiving holiday. Those remarks caused the dollar to plunge, which had gained 10% this year due to the Fed’s bold rate hikes and market expectations of how far the central bank can go.

Currencies

In November, core consumer prices in Japan’s capital rose at the fastest annual rate in 40 years. It exceeded the central bank’s 2.01 percent target for the sixth consecutive month. According to government data, the Japanese yen decreased 0.5 percent on the day to 139.40 per dollar. The euro fell 0.1% against the dollar to $1.0399, not far from a four-month high of $1.0481 set last week.

The New Zealand dollar fell 0.411% to $0.62319, but it remained close to a three-month high reached earlier in the session. The kiwi was on track for a weekly gain of more than 1.5011%, aided by the Reserve Bank of New Zealand’s 75 basis point rate increase this week and hawkish outlook.

For the second time this year, China’s central bank will lower the amount of cash that banks are required to hold as reserves, releasing approximately 500B yuan ($69.8B) in long-term liquidity to support the faltering economy.

The offshore Chinese yuan fell 0.251% to 7.18710 per dollar, heading for a second weekly loss as COVID concerns weighed.