The dollar languished near a nine-month low against a basket of currencies on Friday, bogged down by growing expectations of more hawkish monetary policies in Europe and Canada and doubts about another U.S. interest rate increase this year.
The dollar index, which measures the greenback against a basket of six major currencies, last stood at 95.598. That was near a low of around 95.53 touched this week, its lowest level since early October 2016.
The euro eased 0.1 percent to $1.1430, backing away slightly from a peak of $1.1445 set this week, the common currency’s strongest level in almost 14 months.
The euro has risen rapidly following Tuesday’s speech by European Central Bank President Mario Draghi that convinced markets the ECB was preparing to start reducing its aggressive monetary stimulus later this year.
In addition, comments from Bank of England Governor Mark Carney and two top Bank of Canada policymakers on Wednesday ramped up expectations for interest rate increases from those central banks.
“Obviously there’s a shift afoot. It really seems that there’s some coordinated effort going on out here among the G10 central banks,” said Stephen Innes, head of trading in Asia-Pacific for OANDA in Singapore, referring to the series of hawkish-sounding comments on monetary policy.
“I think what we’re seeing right now, it’s a really tempting market. So this could be more about the fact that nobody wants to miss out on the party,” Innes said, adding that the euro could add to its gains in the near term.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.