The dollar headed for a fifth winning week versus major peers, the longest streak for 15 months, as a resilient U.S. economy argued for high rates for longer while China’s floundering recovery spurred demand for the safety of the U.S. currency.
On Friday, however, the dollar trimmed some of those gains as its rally against the yen kept traders on edge against the risk of intervention, and the yuan edged up after the People’s Bank of China set a much-stronger-than-expected daily fixing.
The U.S. dollar index – which measures the currency against six developed-market rivals, including the yen and euro – eased 0.14% to 103.26 in the Asian morning, after touching a two-month high at 103.59 overnight.
For the week, it is set to gain 0.39%.
On Thursday, minutes from the Federal Reserve’s last meeting showed most members of the rate-setting committee continued to see “significant upside risks to inflation,” suggesting a bias toward further rate increases.
Strong economic data this week, particularly retail sales, had already bolstered the case for additional tightening.