Forex

U.S. dollar was flat but still close to touching its biggest one-week high for the year

Dollar drops

The U.S. dollar traded close to the flat line against its major peers on Friday’s opening bell following the contradicting release of economic figures in the stateside. The rising expectations of the U.S. Federal Reserve inciting an interest rate hike sooner have made the greenback on track for an almost one-week high.

The index which measures the value of the greenback relative to its major opposing currencies, the U.S. dollar index, was nearly unchanged at 93.03 but it helped the currency notched a monthly gain since February. The index advanced to its best level for a week since September by rising more than 0.9 percent last week. It was 0.35 percent higher for the week.

The greenback was pulled down to session lows on the previous trade following the release of reports that suggested the consumer spending in the United States hardly advanced in August. However, the losses were offset by a surprise increase in the purchasing manager index of the University of Chicago.

The U.S. Federal Reserve is planning to maintain rates for the meantime according to chair Janet Yellen last week. This just shows that investors will lift rates this coming December and raise it again next year. The central bank has lifted rates twice this year.

Yellen’s remarks coupled with U.S. President Donald Trump’s released proposal of tax reform has been heightening expectations of a U.S. inflation, with Treasury yields advancing to an almost one-year high last Wednesday.

Looking on other currencies, the dollar was ahead with its Japanese counterpart at 112.49 yen. The euro added 0.31 percent to $1.1821.

 

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