Publications
Partners
New York - The dollar retreated Friday from a months-long rally as uninspiring US economic data left investors pushing back the timing of a Federal Reserve interest rate increase.
According to the Bloomberg Dollar Spot Index, which tracks the greenback against 10 other major currencies, the dollar dropped 1.6% this week. In the year to date, the US currency has climbed 4.8%, after an 11% gain in 2014, Bloomberg News said.
"While the move was driven by back-to-back weakness in US data and mixed comments from Federal Reserve officials, the dollar had become extremely overbought in a very short period of time and a correction is natural," said Kathy Lien of BK Asset Management.
"Traders needed an excuse to take profits and this week's disappointing consumer spending and housing market reports provided the perfect incentive."
The euro rose to $1.0810 around 23:00 from $1.0761 Thursday.
"Even though some US policymakers support a later rate hike, their comments suggest they all see the Fed tightening by September," Lien said.
Finance chiefs of the Group of 20 countries, meeting in Washington on the sidelines of the International Monetary Fund and World Bank spring meetings, said that diverging growth rates and monetary policies in major economies were stirring more uncertainty and sharp swings in markets.
"There are important challenges including volatility in exchange rates and prolonged low inflation, sustained internal and external imbalances, high public debt and geopolitical tensions," the group said.
French Finance Minister Michel Sapin, speaking to journalists after the G20 meeting, said that Europeans seek "stability over the long term" with the euro "at its current level."
"If we would like to, or we would let known that we would like to, let the euro's value fall further, we would enter a dangerous zone," he said.
