US dollar index rises to 7-week high

The US dollar index (DXY) rose to a 7-week high on Friday as investors braced for U.S. interest rates to stay higher for longer after strong U.S. economic data.

The yen fell after a volatile Asian trading session when incoming Bank of Japan Governor Kazuo Ueda said it was appropriate to maintain ultra-loose monetary policy.

Strong US jobs data and rhetoric from Federal Reserve officials about opening higher rates this month to fight inflation caused the dollar to erase its annual losses. On Friday, another measure of inflation – the core personal consumption expenditure index – was higher than expected.

The US dollar index was up 0.49% at 105.11. It posted its fourth consecutive weekly gain, rising 2.53% this month.

The dollar rose for a fourth straight week, underscoring how far the market’s turnaround has come, as data this week again highlighted the strength of the US economy and its underlying inflation drivers.

Markets will likely wait for more comments from the Fed and February data for further rate hikes, Harvey added. Investors expect US rates to peak at 5.35% in July and remain above 5.3% until the end of the year.

What about Europe?

The euro was down 0.12% against the dollar at $1.0584, while sterling was down 0.28% against the dollar at $1.1986.

Due to European sanctions against Russia, the Netherlands imported less crude oil from Russia in the last ten months of 2022 than in the same period of 2021. Imports from other oil-producing countries increased significantly at the same time. Since the start of the war in Ukraine, Russian crude oil prices have risen less rapidly than those from other major oil-exporting countries. This is reported by Statistics Netherlands based on newly published data.

In the period March-December 2022, the Netherlands imported more than 44 billion euros of crude oil. This is almost 77.5 percent more than the same period in 2021. The main factor behind this increase is higher oil prices. The volume of Dutch crude oil imports decreased by about 16 percent.