Dollar on back foot after hawkish tilts by BoE, ECB
The U.S. dollar remained under pressure on Friday, a day after the Bank of England and European Central Bank adopted more hawkish stances than markets had expected, giving a boost to sterling and the euro.
The dollar index , which measures the currency against six major peers including the euro and British pound, started the Asian session at 95.933 following a 0.61% two-day slide that took it as low as 95.850 on Thursday for the first time since Dec. 8.
Sterling edged up to $1.33305, after surging as high as $1.33755 for the first time since Nov. 24 in the previous session, when the BoE surprised most market participants to become the first major central bank to raise interest rates since the beginning of the pandemic.
The euro held about steady at $1.13315 after touching the highest this month at $1.13605 0.5% after the ECB outlined plans toward removing stimulus over coming quarters, although it also emphasized policy flexibility.
The Bank of Japan announces a policy decision later on Friday, but no change is expected to the core elements of its ultra-loose policy with inflation still stuck well below the central bank's target.
The dollar edged higher to 113.76 yen as the currency largely drifted in a 112.5-114.3 range over the past three weeks.
Reference: Reuters
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