The US dollar rose on Friday, extending gains after bullish personal income, spending and manufacturing data in the US Midwest, with market participants also taking profits on short dollar positions this month.
The US dollar index fell 2.1% last month, its biggest monthly loss since December of last year.
Next week’s U.S. data, which includes last month’s non-farm payrolls and major U.S. manufacturing and services indices, should bolster expectations of a strong recovery from the COVID-19 pandemic by the larger economy of the world.
“Another potentially strong set of data in the United States could add pressure to start discussing phase-down,” ING said in its latest research note.
“With possible further weakness in Treasury bills outstanding, the US dollar may find respite from low yielding countries,” the bank added.
After the US Federal Reserve’s policy meeting on Wednesday, Fed Chairman Jerome Powell acknowledged the growth of the US economy, but said there was not enough evidence of “substantial progress” towards the recovery to justify a change in its ultra-flexible monetary parameters.
Data from Friday showing a 4.2% rebound in U.S. consumer spending in March, amid a 21.1% rise in income as households received additional government assistance against COVID-19 , supported the US dollar.
“Powell has remained firm on the path of Fed interest rates and QE [quantitative easing] Wednesday, leaving traders with the uncomfortable feeling that inflation could run away – and run away quickly, ”Cambridge Global Payments currency analyst Adam Corbett said in a research note after the data.
Likewise, the US dollar also rose after the Chicago Purchasing Managers Index posted a reading of 72.1 for last month, the highest in nearly four decades.
In Taipei on Thursday, the New Taiwan Dollar fell against the greenback, losing NT $ 0.012 to close the day’s low of NT $ 27.950, but was up 0.6% for the week. Taiwan’s markets were closed on Friday for International Workers’ Day.
The US dollar index rose 0.75% to 91.30 on Friday to post the biggest daily gain since late February. It rose 0.5% for the week.
The Canadian dollar climbed to a more than three-year high of C $ 1.2266 per greenback on Friday, posting a weekly gain of 1.6%, its highest since early November last year.
The euro fell 0.8% to US $ 1.2025, posting its largest daily percentage decline since late February.
However, it rose 2.5% for the month against the US dollar, its best monthly performance since July of last year.
The US dollar also rose against the yen, up 0.3% to 109.29 ￥, up 1% for the week.
CNA Supplementary Reports, with Staff Writer
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