The dollar fell on Friday but was still on track for its biggest annual gain since 2015, in the last trading day of a year dominated by Federal Reserve rate hikes and fears of a sharp slowdown in global growth.
Asian equities had risen earlier in the session after market sentiment on Wall Street got a boost on Thursday from data showing rising U.S. jobless claims, which suggested the Fed’s interest rate hikes were lowering demand for labor.
With liquidity lower due to holidays, the dollar index was down around 0.308% on the day at 103.650 .
The U.S. Federal Reserve has raised rates by a total of 425 basis points since March in an attempt to curb surging inflation.
As 2022 draws to a close, the dollar has gained around 8% against a basket of currencies – its biggest annual jump in seven years – but it has pared some gains in recent weeks as investors look for signs about when the Fed’s rate-hiking cycle might end.
“I think everyone is struggling with the question of whether the big problem in 2023 will be weak growth or stubborn inflation,” said Adam Button, chief currency analyst at ForexLive.
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