Featured # Markets | 3 years ago

Dollar Rises for 5th Consecutive Week, Pound and Yen Slip

The dollar edged up against the major currencies on Friday, setting it on track for a fifth straight weekly gain as expectations for an increase in rate from the Federal Reserve have resurfaced while other central banks are finding it necessary to cut rates. Returning prospects of a divergence in monetary policy between the U.S central bank and that of its global peers has stagnated the dollar in recent weeks, as it continues to trudge upward in the midst of global uncertainty following Britain’s surprise “Brexit” vote to exit the European Union.

On Friday, the dollar rose 0.15 percent against its currency basket, reaching 97.135, a four-month high on Wednesday. Marc Chandler, chief global currency strategist at Brown Brothers Harriman & Co., pointed to U.S inflation readings, industrial production, retail sales and employment since the Brexit vote that have all successfully beat expectations as a leading cause for investors to bring back ideas of a rate hike by the Fed. Positive data has come as central banks in the eurozone, New Zealand, Australia, Japan, and England are expected to ease their monetary policies in the midst of negative economic and political reports.

The sterling was hit had on Friday as surveys suggested the British economy has started to contract after last month’s Brexit vote. The flash Markit survey of purchasing managers fell significantly, the most in its 20-year survey, prompting the fact that British officials state easing is imminent. The pound was knocked by 1 percent across the board. Against the dollar, the sterling fell 1.04 percent, to $1.3099. The yen was also weakened, weighed down by ideologies that the Bank of Japan meeting will introduce further money-printing initiatives, despite reports suggesting the bank’s view that the economy has not experienced dramatic deterrent. The dollar rose 0.15 against the yen, reaching 105.95 yen.


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