Tension still hangs in the market due to US debt ceiling negotiations between President Joe Biden and Republican House Speaker Kevin McCarthy, although news that the two were close to reaching an agreement boosted investor sentiment and halted the dollar’s rise.
The dollar fell from its highest level in 6 months against the yen in Asian trading, and settled in the last trade at 139.77 yen, after having reached 140.23 yen in the previous session, the most high level since November.
The dollar index fell 0.13% to 104.09 points against a basket of currencies, falling from the highest level in two months, which it recorded yesterday, Thursday, at 104.31 points.
However, the index was on track to gain more than 0.8% for the third week in a row as traders’ expectations rose of possible interest rate hikes in the United States.
Money markets are 40% expecting the Federal Reserve (the US central bank) to raise the interest rate by another 25 basis points at the monetary policy meeting next month, while expectations that it will start cutting interest rates later this year have faded.
Data released on Thursday showed the number of Americans filing new claims for unemployment benefits rose last week to 229,000, a figure lower than expected.
The pound rose 0.13% to $1.2337 but was still on course for a weekly loss of more than 0.8%.
The euro rose 0.15% to $1.0741 and remained close to a two-month low of 1.0708 hit in the previous session.
The single currency was also hurt by confirmation that Germany, Europe’s largest economy, will enter recession in early 2023.
The Australian dollar rose 0.22% to $0.6520, after falling to its lowest level in more than six months at 0.6490 earlier in the session, hurt by China’s faltering economic recovery from the pandemic. of Covid-19.
The New Zealand dollar rose 0.15% to $0.6071 but is expected to post a weekly loss of more than 3%, the largest since September, after the Reserve Bank of New Zealand surprised markets this week indicating that it had finished tightening.
The yuan fell to its lowest level in almost 6 months against the dollar, with some major Chinese banks selling the US currency to prevent the local currency from falling further.
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