Washington (awp/afp) – The dollar reversed course on Friday, releasing part of its gains from the day before when it reached a two-year high.
Around 7:30 p.m. GMT, the American currency dropped 0.39% against the euro, to $1.0305, and lost 0.43% against the pound, to $1.2433.
The Dollar index, which compares the American currency to a basket of other major currencies, also lost ground, falling 0.42% to 108.93 points, after reaching its highest level since November 2022 on Thursday.
The greenback “started the day with a bang” before “running out of steam”, Brad Bechtel of Jefferies observed to AFP.
“The general scenario remains positive” for the “buck”, another nickname for the American currency, however added the analyst.
The dollar still benefits from differences in monetary policies with other countries which are more accommodating, especially since the American Central Bank (Fed) recently adopted a firmer stance than expected.
The American institution is now only considering two cuts in its interest rates this year, compared to four previously projected in the face of persistent inflation.
-The Fed “significantly changed expectations for interest rate cuts, which helped push the dollar higher,” Bechtel said.
“If we add to that the view on (Donald) Trump, it only reinforces the situation,” he added.
The greenback was catapulted by the announced return of Donald Trump to the White House and by the prospect of potentially inflationary policies included in the Republican candidate’s program, such as tax cuts or increased customs duties.
“Further gains are likely (…) the positive factors for the dollar remain intact,” analysts at Brown Brothers Harriman want to believe.
“As Trump’s inauguration and inauguration approach, (the market) could enter a period of volatility,” Bechtel said.
Cours de vendredi Cours de jeudi 19H30 GMT 22H00 GMT EUR/USD 1,0305 1,0265 EUR/JPY 161,91 161,68 EUR/CHF 0,9363 0,9365 EUR/GBP 0,8289 0,8292 USD/JPY 157,11 157,50 USD/CHF 0,9086 0,9123 GBP/USD 1,2433 1,2380
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