The dollar fell today, Friday, in the last trading days in a year dominated by higher US interest rates and fears of a sharp slowdown in global growth, but the US currency is still on its way to achieving its largest annual gain since 2015.
Asian stocks rose earlier in the session after market sentiment on Wall Street got a boost, yesterday, Thursday, from data showing an increase in US jobless claims, indicating that the Federal Reserve’s interest rate hike is starting to reduce demand for employment.
With liquidity declining due to holidays, the dollar index fell about 0.3 percent today to 103.720.
The US Federal Reserve has raised interest rates by a total of 425 basis points since March in an effort to curb inflation.
Against a basket of currencies, the dollar has risen about 8.4 percent so far in 2022, its biggest annual jump in seven years, but it has given up some gains in recent weeks as investors expect the US interest rate hike cycle to end next year.
The euro rose 0.2 percent today to $ 1.0681, and is heading to record an annual loss of 6.2 percent against the dollar, compared to a decline of seven percent last year. Weak growth in the eurozone, the war in Ukraine and tightening US monetary policy have put the euro under pressure this year.
ECB monetary policy committee member Isabel Schnabel said last week that the bank should be prepared to continue raising interest rates, including by more than the market expects, if necessary to bring down inflation.
The pound sterling fell 0.1 per cent, and is set for an annual loss of 11 per cent.
The US dollar fell by 0.9 percent against the Japanese yen to 131.85 yen. The Swiss franc settled at $0.92275.