Written by Saqib Iqbal Ahmed
NEW YORK (Reuters) – The dollar fell against most major currencies on Friday as traders took profits after recent gains, but the US currency remained well positioned to rise further, supported by strong US economic data that pushed markets back on interest rate expectations. Interest rate cuts.
Data on Friday showed that new orders for key capital goods manufactured in the United States rebounded more than expected in April and shipments of those goods also increased, indicating higher business spending on equipment in the early second quarter.
This comes after data on Thursday showed US business activity accelerated in May to the highest level in just over two years, and manufacturers reported higher input prices.
Minutes from the Federal Reserve's latest meeting published this week showed a lively debate among policymakers over whether current rates are restrictive enough to cool inflation.
The dollar fell 0.3% to 104.72 against a basket of currencies on Friday, after advancing in five of the last six trading sessions. Over the course of the week, the index rose 0.2%.
The euro rose 0.3 percent to $1.08495 late Friday.
“Investors are now taking the opportunity to think about the week and take some profits,” said Boris Kovacevic, global market strategist at payments company Convera in Vienna. “It’s really just a positioning game.”
While stronger-than-expected US economic data prompted traders to push back the timing of the Fed's first interest rate cut to September, expectations of rate cuts by other central banks have also eased.
Helen Giffen said: “As much as expectations of Fed easing have cooled over the past week, it is the same for central bankers around the world – the ECB’s rate cut changes have also changed after a lot of official commentary since Monday.” “. , a forex trader at Monex USA in Washington.
Analysts said that despite Friday's decline, the near-term outlook for the dollar was optimistic.
“The issue of American exceptionalism is still there,” Convera's Kovacevic said.
The dollar rose about 1% this week against the Japanese yen to 156.95 yen, although Japanese government bond yields also rose, rising to their highest levels in a decade and exceeding 1% at 10 years. (jb/)
Japan's core inflation slowed for the second straight month in April, matching market expectations – and remaining above the central bank's target – of 2.2%.
“It has very little impact on the yen,” said Martin Wheaton, head of financial markets strategy at Westpac in Sydney. “It's a lot more fun to hold the dollar,” he said, while policymakers' rhetoric has traders worried about inflation and risk rate reductions will be distant or small.
The pound rose 0.3 percent to $1.27365 on Friday.
Data showed that wet weather affected UK consumer spending much more than expected in April, but evidence of steady inflation and this week's surprise announcement of a general election in July kept sterling near two-month highs.
China began its second day of war games around Taiwan. The external market settled around 7.2627.
The New Zealand dollar rose 0.4 percent to $0.61225, supported by a hawkish shift in expectations from the Reserve Bank of New Zealand.
Among cryptocurrencies, ether settled at $3,735.90 on Friday, a day after the US Securities and Exchange Commission approved applications from the Nasdaq, the New York Stock Exchange and the New York Stock Exchange to list exchange-traded funds (ETFs) linked to the ether price, potentially paving the way. To begin trading the products later this year. Over the course of the week, the price of ether rose by about 20%.