The Dollar Remained Just Below the Month’s High

The safe-haven dollar held just below the month’s high against the yen on Friday.

Christine Lagarde, president of the European Central Bank, stated that this is not enough and the bank must continue the fight against inflation at a steady pace after the policy board raised interest rates overnight.

The U.S. Federal Reserve also tightened policy the day before, with Chair Jerome Powell stating that policymakers anticipated rates to increase further and remain high for longer.

The dollar index, which compares the dollar value to the euro, the yen, and four other currencies, declined 0.06% to 104.45 in early Asian trading, but this came after an overnight increase of 0.85%, which was the largest since late September.

The dollar index, however, has had a volatile week, putting it on course to decline by 0.47% overall.

For the first time since November 30, the dollar increased on Thursday, reaching a high of 138.18 yen and closing the day with a gain of 1.68%. It dropped back 0.18% to 137.51 yen on Friday.

The euro increased by 0.08% to $1.0637, reversing some of Thursday’s 0.49% loss.

Sterling, a component of the dollar index, increased by 0.11% to $1.21945 after falling by 1.99% the day before.

On Thursday, the Bank of England also increased its benchmark interest rate and said additional increases were likely. On the other hand, investors made a wager that the BoE might be nearing the conclusion of its increases in borrowing costs.

After steep declines the day before, the risk-sensitive antipodean currencies stabilized on Friday.

The Australian dollar increased by 0.13% to $0.67085 after falling by 2.38% overnight and touching $0.6677 for the first time since December 7. The New Zealand dollar recovered 0.19% to $0.6353 on Friday after falling 1.84% on Thursday and reaching $0.6321 for the first time since December 7.