The US dollar rose against the euro on Friday, as investor unease about the potential economic fallout from the US Federal Reserve’s efforts to squash inflation bubbled to the surface, souring risk sentiment on Wall Street.
The US dollar rose 0.21 percent against the euro as US stocks tumbled on Friday, putting the S&P 500 Index on the verge of confirming it has been in a bear market since hitting a record high in January.
However, the session’s gains for the US dollar were not enough to erase sharp losses from earlier this week that have pulled the greenback away from a five-year high against the common currency, on worries that its months-long rally might have been overdone.
Photo: Reuters
The US currency has been supported in the past few months by a flight to safety by investors, amid a rout across markets due to fears of the effects of soaring inflation, a hawkish Fed and the Russia-Ukraine conflict.
However, that rally sputtered this week as increased volatility in global financial markets, coupled with the lofty levels the US dollar had scaled in the past few months, led investors to reach for the safety of the yen and the Swiss franc.
For the week, the US currency was down 1.44 percent, its worst weekly showing against the euro since early February.
“We see the buck as a bit elevated for sure and see room for other currencies to flourish, as there is a gradual shift to better prospects if the global economy is to be helped out and revived from a terrible first half to the year,” said Juan Perez, director of trading at Monex USA in Washington.
The New Taiwan dollar rose against the US dollar on Friday, gaining NT$0.114 to close at NT$29.655, up 0.5 percent from a week earlier.
Some safe-haven currencies have rallied this week as global equities have come under pressure.
The Swiss franc rose 2.77 percent weekly versus the US dollar, while the Japanese yen posted a 1.05 percent weekly gain.
Sterling, up 0.16 percent on Friday, rose 1.87 percent against the US dollar for the week, as the latest economic data suggested the market might not need to scale back its expectations for Bank of England rate hikes much further.
Additional reporting by CNA, with staff writer
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