The dollar continued to show weakness yesterday, as supportive comments from the White House and European officials managed to provide only limited relief amidst ongoing uncertainty regarding U.S. economic policies and geopolitical developments.
This week, the dollar saw a significant drop, reaching a four-year low following remarks that indicated President Donald Trump downplayed the significance of the currency’s depreciation. However, it received some backing after Treasury Secretary Steven Mnuchin stated the day after that Washington maintains a policy favoring a strong dollar.
The euro, which briefly surpassed the $1.20 mark due to the decline of the U.S. dollar, was slightly below that level at $1.1988 during Asian trading sessions, as policymakers at the European Central Bank expressed growing concerns about the implications of its rapid appreciation. The intense selling pressure on the dollar eased somewhat yesterday, but it remained in a downward trend.
The dollar fell by 0.43% against the Swiss franc to 0.7654, nearing an 11-year low, while the British pound hovered close to a four-and-a-half-year high at $1.3844.
The Australian dollar climbed by 0.72% to $0.7092, reaching its highest level in three years, buoyed by expectations of an interest rate hike in Australia next week.
The U.S. dollar index, which measures the performance of the dollar against a basket of major currencies, stood at 96.06, remaining close to its four-year low of 95.566 recorded on Tuesday. Its decline offered some support to the struggling Japanese yen, which rose 0.25% to 153 against the dollar yesterday.
The yen traded within a range of 152 to 154 against the dollar for most of the week amid discussions between the U.S. and Japan regarding interest rate adjustments last week, a step typically seen as a precursor to intervention.
The New Zealand dollar approached a seven-month peak at $0.60925, while the yuan stabilized near a 32-month high at 6.9471 per dollar.