ANL 32.21 Increased By ▲ 0.51 (1.61%)
ASC 18.65 Increased By ▲ 1.20 (6.88%)
ASL 26.45 Decreased By ▼ -0.15 (-0.56%)
AVN 91.35 Increased By ▲ 0.85 (0.94%)
BOP 8.21 Increased By ▲ 0.03 (0.37%)
BYCO 11.84 Increased By ▲ 0.49 (4.32%)
DGKC 126.00 Decreased By ▼ -2.50 (-1.95%)
EPCL 48.20 Increased By ▲ 0.05 (0.1%)
FCCL 23.96 Increased By ▲ 0.06 (0.25%)
FFBL 27.90 Decreased By ▼ -0.09 (-0.32%)
FFL 17.79 Decreased By ▼ -0.15 (-0.84%)
HASCOL 11.45 Increased By ▲ 0.25 (2.23%)
HUBC 78.30 Decreased By ▼ -0.70 (-0.89%)
HUMNL 8.64 Decreased By ▼ -0.08 (-0.92%)
JSCL 24.65 Increased By ▲ 0.35 (1.44%)
KAPCO 44.75 Increased By ▲ 0.06 (0.13%)
KEL 4.19 Decreased By ▼ -0.03 (-0.71%)
LOTCHEM 16.31 Decreased By ▼ -0.29 (-1.75%)
MLCF 46.70 Decreased By ▼ -0.35 (-0.74%)
PAEL 36.20 Increased By ▲ 0.32 (0.89%)
PIBTL 11.04 Decreased By ▼ -0.11 (-0.99%)
POWER 10.08 Decreased By ▼ -0.02 (-0.2%)
PPL 90.20 Decreased By ▼ -0.50 (-0.55%)
PRL 26.25 Increased By ▲ 0.31 (1.2%)
PTC 14.00 Increased By ▲ 0.99 (7.61%)
SILK 1.58 Increased By ▲ 0.02 (1.28%)
SNGP 48.20 Increased By ▲ 0.25 (0.52%)
TRG 168.50 Decreased By ▼ -3.30 (-1.92%)
UNITY 49.39 Increased By ▲ 0.14 (0.28%)
WTL 4.26 Increased By ▲ 0.01 (0.24%)
BR100 5,282 Increased By ▲ 24.37 (0.46%)
BR30 27,601 Increased By ▲ 45.56 (0.17%)
KSE100 48,305 Increased By ▲ 53.23 (0.11%)
KSE30 19,479 Decreased By ▼ -58.87 (-0.3%)
Markets

Dollar looks stronger as euro and sterling dip

  • Currency markets had been sluggish all week in anticipation of Thursday's release of U.S. consumer prices, which rose 5pc year-on-year in May.
Updated 12 Jun 2021

NEW YORK: The euro and sterling dipped against the dollar on Friday as investors bet interest rates would stay lower for longer in Europe and Britain while looking ahead to next week's U.S. monetary policy meeting.

The dollar index, showing its strongest weekly gain since early May, was last up 0.57pc on the day at 90.5810 while the euro was down 0.63pc at $1.2099, on track for its biggest weekly decline since the end of April.

A day after the European Central Bank stuck to its dovish stance, ECB policymaker Klaas Knot said that flexible fiscal rules would be needed for years as monetary policy remains constrained.

"ECB policy makers are indicating that inflation rates are way below levels that are needed to put upward pressure on rates," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.

"That's cutting away at the euro's recent rally, putting some downward pressure on it. The biggest contributor to the move we've seen overnight is the (euro) weakness as opposed to idiosyncratic dollar positive forces. The dollar's winning the reverse beauty contest," Schamotta added.

Sterling was down 0.54pc at $1.4098 as traders worried about slower-than-expected growth as the rapid spread of the Delta variant in Britain raised concerns that much of the country may not be able to fully reopen from a COVID-19 pandemic-related lockdown on June 21, as previously hoped.

Currency markets had been sluggish all week in anticipation of Thursday's release of U.S. consumer prices, which rose 5pc year-on-year in May.

But even with the number above expectations, there was little market reaction. Investors seemed to back the Federal Reserve's assertion that high inflation would be temporary.

Economists see the central bank announcing in August or September a strategy for reducing its massive bond-buying program, but do not expect it to start cutting monthly purchases until early next year, a Reuters poll found.

Traders were still preparing for volatility around the Federal Open Market Committee meeting scheduled for the week ahead, according to Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets

"If you're starting from a position where you're already short dollars, since FOMC meetings often have a lot of volatility, you might reduce your short for risk management purposes," Anderson said.

Meanwhile investors left riskier currencies such as the Australian dollar, which was down 0.72pc at $0.7697 after hitting its lowest level for the week while the New Zealand dollar was off 1.01pc at $0.7123 after touching its lowest level since May 4.

In cryptocurrencies, bitcoin, which recovered slightly in recent sessions, was on track for a 3pc weekly gain and last up 0.3pc at $36,817.94 on the day. Ether was last down 3pc and set for an 11.7pc weekly drop.

Both are still trading significantly below their earlier peaks.