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Dollar set for back-to-back weekly losses on Fed’s lower-for-longer stance

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TOKYO — The dollar headed for its worst

back-to-back weekly drop this year amid an extended retreat in

Treasury yields as investors increasingly bought into the

Federal Reserve’s insistence of keeping an accommodative policy

stance for a while longer.

The benchmark 10-year Treasury yield dipped to a

one-month low of 1.528% overnight, moving further away from over

a one-year of 1.776% reached at the end of last month, even in

the face of Thursday’s stronger-than-expected retail sales and

employment data.

San Francisco Fed President Mary Daly said on the same day

that the U.S. economy is still far from making “substantial

progress” toward the central bank’s goals of 2% inflation and

full employment, the bar the Fed has set for beginning to

consider reducing its support for the economy.

That echoed Fed Chair Jerome Powell’s comments in several

speeches over the past week that policymakers will look through

near-term rises in prices amid ongoing slack in the labor


The dollar index, which tracks the greenback against

six major peers, dipped to an almost-one-month low of 91.487

overnight before recovering somewhat to 91.752 in the Asian


It’s set for a 0.5% decline for the week, extending the 0.9%


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slide from the previous week.

The gauge, also known as the DXY, surged with Treasury

yields to an almost-five-month high at 93.439 on the final day

of March, on bets that massive fiscal spending coupled with

continued monetary easing will spur faster U.S. economic growth

and higher inflation, particularly compared to places like


But bond and foreign-exchange markets now seem willing to

give the Fed the benefit of the doubt that inflation pressure

will be transitory and monetary stimulus will remain in place

for years to come.

The dollar is “still struggling to find its feet in April,

even though the U.S. macro outperformance narrative could not be

more propitious,” Westpac strategists wrote in a research note.

“The DXY is trading like its topping out now, sooner than

(we) expected,” and a break below 91.3 would confirm the

downtrend, they said.

Retail sales increased 9.8% last month, beating economists’

expectations for a 5.9% rise, while first-time claims for

unemployment benefits tumbled last week to the lowest level in

more than a year, separate reports showed Thursday.

The dollar traded at 108.825 yen, heading for a

0.8% loss for the week, following a 0.9% decline the previous


The euro changed hands at $1.19585, set for a 0.5%

weekly advance, adding to the previous period’s 1.3% surge.

Some analysts also pointed to Wall Street’s strong gains,

with the S&P 500 and Dow both posting record highs, as weighing


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on the traditionally safe-haven dollar amid increased risk


“Lower U.S. bond yields and positive risk sentiment have

once again been a cocktail fueling a softer USD,” Ray Attrill,

the head of foreign-exchange strategy at National Australia

Bank, said in a note to clients.

The rally in equities has “driven a wedge between the strong

data and the USD,” he said.

Highly anticipated economic data from China on Friday

ultimately had little effect on currencies, even as the world’s

second largest economy posted record 18.3% growth in the first

quarter year-on-year.

The Chinese yuan slipped 0.1% to 6.5326 per dollar in the

offshore market.

In cryptocurrencies, Bitcoin stood around

$62,850, near the record high of $64,895 reached on Wednesday,

when cryptocurrency platform Coinbase COIN.O made its debut in

Nasdaq in a direct listing.


Currency bid prices at 401 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change


Euro/Dollar $1.1957 $1.1966 -0.07% -2.13% +1.1975 +1.1951

Dollar/Yen 108.8200 108.7050 +0.17% +5.42% +108.9270 +108.6900

Euro/Yen 130.13 130.15 -0.02% +2.53% +130.2300 +129.9800

Dollar/Swiss 0.9226 0.9221 +0.10% +4.32% +0.9235 +0.9220

Sterling/Dollar 1.3757 1.3781 -0.16% +0.71% +1.3785 +1.3754

Dollar/Canadian 1.2543 1.2548 -0.04% -1.50% +1.2558 +1.2536

Aussie/Dollar 0.7731 0.7748 -0.21% +0.51% +0.7754 +0.7724

NZ 0.7159 0.7171 -0.13% -0.26% +0.7177 +0.7151


All spots

Tokyo spots

Europe spots


Tokyo Forex market info from BOJ

(Reporting by Kevin Buckland

Editing by Gerry Doyle & Shri Navaratnam)


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