TOKYO: The dollar headed for its best week in almost three years against its major peers, maintaining momentum on Friday after U.S. President Donald Trump set new tariff rates on dozens of trade partners.
The yen touched a four-month low against the greenback, extending its steep decline from Thursday after the Bank of Japan signalled it was in no hurry to resume interest rate hikes.
In trade-related moves, the U.S. currency gained ground on the Swiss franc after Trump set a 39% tariff rate on Swiss imports, up from the 31% he previously mooted. Canada’s dollar dipped to a more than two-month trough after the country received a 35% levy instead of an earlier threatened 25%.
The euro remained pinned near an almost two-month low, as it continues to be weighed down by what markets see as a lopsided trade agreement with Washington.
The U.S. dollar stayed strong even though Trump continued his attacks on Federal Reserve Chair Jerome Powell overnight, calling him a “terrible” Fed Chair and calling his own decision to appoint Powell to the position a “mistake”.
Trump’s repeated threats to fire Powell and calls for the Fed to drastically cut rates has put the central bank’s independence in question, hurting the dollar in recent months.
“In the short-term you can make the case for more dollar strength,” said Mike Houlahan, director at Electus Financial in Auckland. “The lion’s share of the tariff news has washed through.”
“The big move of the week has really been the euro getting rerated downwards,” he said. “The net result would be the EU-U.S. trade deal is a further headwind for the euro.”
The U.S. dollar index - which measures the currency against a basket of six major peers including the euro, yen, Swiss franc and Canada’s loonie - pushed as high as 100.10 overnight, topping 100 for the first time since May 29.
Euro hovers near one-month lows after trade deal, focus switches to Fed
The yen changed hands at 150.64 per dollar after dipping to 150.89 per dollar early on Friday, its weakest since March 28.
The euro hovered around $1.1420, not straying far from Wednesday’s low of $1.1401, a level not seen since June 10.
The franc eased as much as 0.26% to 0.8120 per dollar.
The loonie slipped 0.12% to plumb its lowest since May 22 at C$1.3872 versus its U.S. peer.
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