The U.S. dollar remained near a 13-month high on Friday as investors weighed the Federal Reserve's interest rate outlook and uncertainty in Europe that kept the euro lower, while the bitcoin was targeting the $100,000 level.
The yen, for its part, held steady against the greenback after core inflation figures remained above the Bank of Japan's (BOJ) 2% target, a sign that economic conditions a new increase in interest rates is taking place.
The dollar index edged down 0.05% to 107.01, not far from Thursday's one-year high of 107.15, its highest level since October 4, 2023, with little data this week to put the brakes on his march upwards.
Overnight data showed U.S. weekly initial jobless claims unexpectedly fell to a seven-month low, but also indicated some easing as it takes longer for unemployed workers to find work. new employment, which gives the Fed room to cut rates again in December.
Global PMIs are due later today, although those numbers aren't expected to change things too much, said Tony Sycamore, market analyst at IG.
“It's now about trying to find the catalysts (…) (and) it will obviously be a question of knowing whether the Fed reduces its rates or not” in December, declared Mr. Sycamore.
The US Consumer Price Index for October, scheduled for release next Friday, will be the center of attention.
The dollar has risen about 3% since the start of the month on expectations that U.S. President-elect Donald Trump's policies could reignite inflation and limit the Fed's ability to cut rates.
Recent comments from Fed officials, including Chairman Jerome Powell, have indicated that the central bank may slow its rate-cutting trajectory.
Expectations regarding the path of rate cuts have been reduced recently, but remain somewhat volatile. Markets are pricing in a 57.8% chance of a 25 basis point cut at the December Fed meeting, up from 72.2% a week ago, according to the CME's FedWatch tool.
Among the Trump policies that have weighed on investors' minds are the president-elect's campaign promises on tariffs, with Europe and China likely to be in the crosshairs.
But factors such as the scale and sequencing of the new president's policies remain unknown and are unlikely to be revealed until Mr. Trump's inauguration in January.
The euro, which makes up a large part of the dollar index, stabilized at $1.0475 after falling to a 13-month low of $1.0461 on Thursday.
The euro was one of the main victims of the rise of the dollar after the elections. Recent escalations between Russia and Ukraine and political uncertainty in Germany, the European Union's largest economy, have weighed on the euro.
Sterling traded at $1.25915, up 0.03% so far on the day.
Bitcoin hit the $100,000 mark, holding steady at $98,080.92 after hitting a record high of $99,057 on Thursday.
The cryptocurrency has surged more than 40% since the US election as Mr Trump is expected to ease the regulatory environment for cryptocurrencies.
The Japanese yen, which was pushed below 156 per dollar last week, received a boost when Japan's October core inflation held above the 2% target. the central bank to reach an increase of 2.3% compared to the previous year, according to data published Friday.
“The further strengthening of core inflation, coupled with the recent rebound in consumer spending and the further weakening of the yen, strengthens the case for another BOJ rate hike next month,” Marcel wrote Thieliant, head of Asia-Pacific at Capital Economics, in a research note.
The dollar was down 0.17% on the day at 154.27 yen.
BOJ Governor Kazuo Ueda said on Thursday that the bank would carefully review the data ahead of its rate review next month, and would take “seriously” into account the impact that movements in the yen could have on the economy and price prospects.
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