Yen set to snap 3-week losing streak on bank jitters, dollar slides

The yen was close to its first weekly gain in nearly a month on Friday, driven by safe-haven demand as bank sector turmoil in the U.S. unfolds, while the dollar fell as traders priced in more aggressive rate cuts from the Federal Reserve.

The euro edged away from its recent one-year peak and last stood at $1.1043, after the European Central Bank (ECB) on Thursday slowed the pace of its interest rate increases with a 25-basis-point rise, though the single currency was still higher on the day against a sliding greenback.

Although ECB President Christine Lagarde signalled more tightening to come, markets pared back their expectations on how much further rates would rise.

“Lagarde was hawkish in her press conference, but I think financial markets didn’t really buy her view on further rate rises in coming months,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

In the broader currency market, the yen was last more than 0.2% higher at 133.96 per dollar, and was headed for a weekly gain of over 1.5%, snapping three straight weeks of losses.

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