SINGAPORE (Reuters) – The dollar inched higher against a basket of major currencies on Friday, having pulled back from one-month highs set this week as investors pondered the Trump administration’s tax plan and the outlook for Federal Reserve policy.
The dollar index, which tracks the greenback against a basket of six major currencies, rose 0.1 percent to 93.155 .DXY, languishing below Thursday’s peak of 93.666, its highest level since Aug. 18.
For the week, the dollar index has gained 1.1 percent, putting it on track for its biggest weekly gain since December.
The dollar rose this week on renewed hopes for U.S. tax reforms, as well as comments from Federal Reserve Chair Janet Yellen that stressed the need for gradual interest rate hikes.
Traders are probably taking profits in the wake of the dollar’s rally, said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.
“It’s also the realisation that we’ve been down this tax reform road before, and I don’t think it’s going to be easy… There’s going to be a lot of back and forth, a lot of squabbling,” Innes added.
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