© Reuters. FILE PHOTO: The US dollar banknotes shown in this illustration were taken, February 14, 2022. REUTERS/Dado Ruvic
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By Karen Brettell
NEW YORK (Reuters) – The dollar fell on Friday as investors assessed the high degree to which the US Federal Reserve (Fed) is likely to raise interest rates later this month and as investors close Profits after a sharp rally that sent the greenback two decades on. high on Thursday.
The greenback jumped as the Fed was expected to raise interest rates faster and further than peer central banks as inflation surged to a 4-decade high.
The dollar rallied on Friday after data showed US retail sales rose more than expected in June.
“It was a bit better than expected, but I think everyone realizes that maybe it’s due to inflation,” said Joseph Trevisani, senior analyst at FXStreet.com in New York. He added that investors are closing positions before the end of the week and after “a long period of strong dollar gains.”
The last price was 108.24, down 0.30% on the day. It hit 109.29 on Thursday, the highest since September 2002.
The euro rose 0.39% to $1.0062. It traded as low as $0.9952 on Thursday, its lowest level since December 2002.
Traders bet the Fed will raise rates even faster after data on Wednesday showed annual US consumer prices rose 9.1% in June, the biggest gain in more than four decades. .
The odds of a 100-basis-point increase, however, faltered, after two of the most hawkish Fed officials on Thursday said they wanted a 75-basis-point increase.
Fed funds futures now show a 73% chance of a 75 basis point gain and a 27% chance of a 100 basis point gain.
The euro faces two major catalysts next week, with the European Central Bank expected to raise interest rates by 25 basis points for the first time since 2011 when it meets on May 21. 7.
Investors will also focus on whether the vital Nord Stream 1 gas pipeline to Germany from Russia will reopen after closing for maintenance this week. Scheduled to reopen on July 21, but European governments fear that Moscow may extend to limit European gas supplies, disrupting plans to build stockpiles. for winter.
The dollar fell 0.09% against the Japanese yen, after touching a 24-year high on Thursday as Japan’s central bank maintained its dovish stance, contrasting with the hawkish moves of other countries. other central banks.
The Australian dollar rose 0.29%, after falling to a two-year low on Thursday on concerns about global growth.
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Currency bid price at 9:22 AM (1322 GMT)
RIC Description Last US Close Pct Change YTD Pct Bid High Bid Low Bid Low
Previous change
Meeting
Dollar Index 108.2400 108.5700 -0.30% 13.147% +108,7200 +108.0200
Euro / Dollar $1.0062 $1.0023 + 0.39% -11.49% + $1.0084 + $1,0007
Dollar / Yen 138,8100 138,9350 -0.09% + 20.58% +139,1200 +138,5100
Euro / Yen 139.69 139.21 + 0.34% + 7.19% +139.8200 +138.7600
Dollar / Swiss 0.9796 0.9835 -0.44% + 7.35% +0.9841 +0.9771
British Pound / Dollar $1.1832 $1.1826 + 0.08% -12.49% + $1.1870 + $1.1805
Dollar / Canada 1.3054 1.3117 -0.48% + 3.24% +1.3135 +1.3030
Aussie / Dollar $0.6766 $0.6749 + 0.29% -6.89% + $0.6788 + $0.6720
Euro / Swiss 0.9858 0.9856 + 0.02% -4.93% +0.9861 +0.9827
Euro / Pound 0.8502 0.8471 + 0.37% + 1.21% +0.8514 +0.8465
NZ $0.6147 $0.6123 + 0.59% -10.02% + $0.6166 + $0.6121
Dollar / Dollar
Dollar / Norwegian 10.1965 10.2270 -0.32% + 15.72% +10.2800 +10.1780
Euro / Norway 10.2620 10.2497 + 0.12% + 2.49% +10.3028 +10.2463
Dollar / Sweden 10.5185 10.5679 -0.09% + 16.64% +10.5959 +10.4858
Euro / Sweden 10,5850 10.5950 -0.09% + 3.43% +10.6147 +10,5730
