The dollar retreated slightly from its recent 20-year high on Friday but is still on course for its best month since 2015, having been boosted by a combination of expectations of US rate hikes and growth concerns in China and Europe.
On the final day of a seismic month for currency markets, major currency pairs retreated slightly from their recent trajectories as global markets stabilized and a Chinese tech rally put equities Asians on track for their best day in six weeks.
Weaker-than-expected US growth data on Thursday did little to dampen the dollar’s rise, with investors still expecting a 50 basis point rate hike at the Federal Reserve’s meeting next week. “The Fed has worked hard to get the markets to where they are today and surprisingly weak GDP would never have unraveled all of that,” MUFG research director Derek Halpenny said in a statement. note to customers.
The euro was on course for a 4.4% monthly decline against the dollar, poised for its worst month since 2015. After hitting $1.05 for the first time in five years on Thursday, it stabilized somewhat on Friday at $1.10575. The euro has lost around 6.5% against the dollar since Russia invaded Ukraine on February 24, as investors worried about energy security, inflation and growth in Europe. Traders were awaiting GDP and “flash” inflation data from the Eurozone, due at 0900 GMT. European currencies could benefit if inflation data surprises on the upside, prompting remarks from more hawkish European Central Bank members, ING FX strategists wrote in a client note.
The dollar-yen remained above the key psychological level of 130, at 130.065, after crossing 130 for the first time in 20 years on Thursday, when the Bank of Japan promised to stick to its super rate policy. low. Meanwhile, the pound edged higher to $1.256 on the weaker dollar, but was still poised for its biggest monthly decline since 2016.
The US greenback gained ground against all these currencies (Euro, British Pound, Australian Dollar, Canadian Dollar and Japanese Yen) during the month of April