Dollar Rises After Trump, Zelenskiy Public Argument
The dollar extended its advance on Friday, after US President Donald Trump’s meeting with Ukraine’s Volodymyr Zelenskiy turned into a public argument. The stall in peace talks weighed on the euro. The Canadian dollar was outperforming peers in the Group of 10 after a domestic GDP report beat estimates.
The Bloomberg Dollar Spot Index rose as much as 0.4%, rising to day’s high after Trump, Zelenskiy argued at the White House.
The dollar gauge was at the highest since Feb. 13; China warned it would hit back at Trump’s trade threats after the US president unveiled additional tariffs on Chinese imports.
The index headed for its first weekly advance this month as tariff announcements weighed on risk sentiment while month-end flows also offered support.
The Federal Reserve’s preferred measure of underlying inflation rose at a mild pace in January, offering some relief after a string of reports suggested price pressures are heating up again
Bank of Cleveland Fed President Beth Hammack said she doesn’t expect a rate hike if inflation pressures remain over the Fed’s 2% target and that future price pressure expectations are “still anchored”.
Risk premium from tariffs isn’t all “baked in” because of so many false starts, but it needs to be build up, Skylar Montgomery Koning, a currency strategist at Barclays Plc., told Bloomberg Television Friday
Fundamentals have been favoring the dollar as well, so it’s “quite hard to be short dollar,” she said.
EUR/USD fell as much as 0.4% to 1.0362; the common currency was advancing earlier in the session.
French inflation retreated to its lowest level in four years, while prices in Italy unexpectedly held steady — backing continued interest-rate cuts by the European Central Bank.
USD/CAD was down 0.2% at 1.4458.
Canada’s economic growth accelerated last quarter and momentum carried into the start of this year as the central bank’s rate cuts boosted household spending.
USD/JPY gained 0.5% to 150.38; it’s up 0.8% this week.
Bank of Japan will raise interest rates and adjust degree of monetary easing if its price outlook is realized, Deputy Governor Shinichi Uchida said.
Tokyo inflation slowed more than expected, a result that isn’t likely to deter the central bank from considering more hikes to its benchmark interest rate.
GBP/USD fell 0.3% to 1.2562; Bank of England Deputy Governor Dave Ramsden said policymakers will have to take “great care” when cutting interest rates amid signs that UK inflation may remain more persistent than previously thought.
Source : Bloomberg
