The dollar stood at its highest levels of the year against sterling and the euro on Thursday, while the yen was smarting from its sharpest drubbing in a month, after the hottest U.S. inflation reading in a generation fanned bets on rate hikes.
The dollar held a three-day loss against major peers and traded near a one-month low to the yen on Wednesday, with highly anticipated U.S. inflation data looming that could guide the timing of a Federal Reserve interest rate increase.
The dollar was down on Tuesday morning in Asia, remaining a little below 2021’s peaks hit on Tuesday. Cryptocurrencies scaled records, while inflation numbers loom as the next test of traders’ thinking on the outlook for interest rates.
The dollar made a steady start to the week on Monday but was kept below Friday peaks, as currency traders seek a path between markets’ volatile interest rate projections and central bankers vowing to keep rates low even as inflation surges.
The dollar was on course for a second straight week of gains against major peers on Friday, ahead of a key U.S. jobs report that could sway the timing of Federal Reserve interest rate increases.
The dollar lost ground on the euro and sterling on Thursday after the U.S. Federal Reserve said it would not rush to raise interest rates even as it began unwinding its pandemic-era stimulus.
