The dollar rose as US Treasury yields rose on Friday, heading for a third week of gains, as a wave of strong economic data in the United States increased market expectations that a new interest rate hike is on the horizon.
Thursday’s data showed that the number of Americans who filed new applications for unemployment benefits fell unexpectedly last week, while other data revealed that monthly producer prices rose by the most in seven months in January.
The new data gave a boost to the dollar, pushing the pound to a six-week low of $1.1957 on Friday, while the euro fell 0.15% to $1.0657.
Similarly, the Australian and New Zealand dollars remained near the 6-week lows they hit in the previous session.
The Australian dollar fell in the latest transactions by 0.29% to $ 0.68595, after falling to $ 0.68405 Thursday. Its New Zealand counterpart fell 0.27% to $0.62385, after hitting its lowest level since January 6 in the previous session.
“The US economy is showing, according to recent data, that it is still resilient. It doesn’t look like it will enter a recession anytime soon,” said Tina Ting, market analyst at CMC Markets.
She added that markets expect interest rate increases for a longer period.
Thursday’s reports came on the heels of data released earlier in the week that showed strong growth in US retail sales in January and signs of persistent inflation, raising fears that the Federal Reserve will be forced to raise interest rates at a faster rate than expected. previously expected.
US Treasury yields also rose as interest rate expectations changed.
The benchmark 10-year Treasury yield peaked at 3.878% Friday, the highest level since December 30.
Against a basket of currencies, the dollar index advanced 0.09% to 104.20, after reaching the highest level in more than a month at 104.24 in the previous session. It is on track for its third straight weekly gain.
The dollar also rose 0.25% against the Japanese yen, recording 134.29.
The dollar is heading for weekly gains of more than 2% against the yen, its best week since last October.
Japanese Finance Minister Shunichi Suzuki said Friday that the government has chosen academic Kazuo Ueda as the new head of the central bank on expectations that he can help keep inflation at the target level, maintain economic growth and raise wages.
Reuters
