U.S. Dollar Drops as Interest Rate Expectations Decline

0
103

U.S. Dollar Drops as Interest Rate Expectations DeclineThe dollar posted its first decline against its peers in a month on speculation that the US economy is faltering, boosting bets the Federal Reserve may retain the record-low interest rates for longer.

The dollar advanced 0.3 percent to close at 102.36 yen in Friday. The euro dropped 0.1 percent to trade at $1.3401 as it posted its fifth weekly drop, its longest losing streak since March 2013. The yen plunged 0.2 percent to steady at 137.16 versus the euro.

“U.S. data has been a little bit soft as of late — I don’t think it’s enough for the Fed to change its course in terms of raising interest rates,” Fabian Eliasson, a New York-based foreign-exchange specialist at Mizuho Financial Group Inc, told Bloomberg News. “Geopolitical risks are constantly hanging over our head.”

The pound dropped for the sixth straight week versus the dollar, the longest drop in four years, after traders lowered their estimates of when the first interest rate hike may be rolled out since 2007. The Bank of England Governor Mark Carney disclosed on August 13 that the bank’s policy makers will rely on wage growth to determine whether it is time to increase interest rates.

The pound retreated 0.5 percent to trade at $1.6693 last week, the longest losing streak since June 2010. The currency had earlier hit $1.6658 on August 14, the lowest level since April 8. The sterling skidded 0.4 percent to 80.29 pence per euro. It also touched 80.36, the weakest level since June12. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com