Dollar Holds Gains as Haven Demand Offsets Mixed US Data
The US dollar held on to modest gains after economic data showed growth was weaker at the end of last year than previously reported, while inflation-adjusted spending rose only marginally. The Canadian dollar weakened against the greenback following soft Canadian jobs figures.
The Bloomberg Dollar Spot Index was up 0.2% after rising as much as 0.5% earlier, and was on track for a weekly gain of about 0.7%. The dollar’s resilience reflected a mix of domestic data signals and a continued bid for safety amid heightened geopolitical uncertainty.
Steven Englander, head of G-10 FX research at Standard Chartered, said the downward revision to fourth-quarter GDP and the durable goods report likely pushed rates and the dollar lower more than the PCE release, but the overall impact was limited. He cited the backward-looking nature of the GDP data, distortions linked to the government shutdown, and the volatility of monthly durable goods figures.
In energy markets, Brent traded around $99 a barrel after the US Treasury issued a second authorization allowing buyers to take delivery of Russian oil cargoes already at sea, a move aimed at easing mounting pressure on prices.
Elias Haddad, global head of markets strategy at BBH, said rising US stagflation risk is not positive for the dollar. However, he added that as long as the Strait of Hormuz remains effectively closed to shipping, the dollar can continue to benefit from haven demand driven by dollar funding needs.
USD/JPY was little changed at 159.27 after earlier gaining as much as 0.2% to 159.69. Japan’s Finance Minister Satsuki Katayama said authorities are prepared to take all necessary measures on the currency under all circumstances, while keeping in mind the impact of higher oil prices on daily life. Japan’s financial authorities have also been in closer contact than usual with US counterparts as the yen trades near its weakest levels of the year amid broader market volatility tied to the Iran conflict.
EUR/USD fell 0.3% to 1.1478 after earlier sliding to 1.1433, its lowest level in more than seven months. GBP/USD dropped 0.6% to 1.327, the weakest since March 3. AUD/USD declined 0.5% to 0.7043.
USD/CAD fell 0.5% to 1.3705 after Canada posted its largest employment decline in more than four years in February.
Source : Newsmaker.id
