The U.S dollar rose against the yen and euro on Thursday, January 26 but the prospect of stronger U.S. economic growth was not enough to drive the CURRENCY significantly higher as the weight of bets on a stronger greenback made some investors nervous.
The dollar index .DXY was flat on the day at 100.01, having hit a seven-week low of 99.793 earlier in the day. It gained 0.1 percent to $1.0741 against the euro and 0.4 percent to 113.68 yen.
While equities and Treasury yields have continued to rise, fueled by U.S. President Donald Trump’s signals that he plans to increase public spending, expectations of a boost to growth have had a diminishing impact on the dollar in the past 10 days.
Current market players have offered a variety of explanations for that breakdown, from concerns about Trump’s protectionist bent to his warning over the dollar’s strength and worries about his approach to geopolitical and social issues.
Speculators have gradually cut their net bets on a stronger dollar from $25.43 billion in the week ending Jan. 3 to $24.44 billion in the week to Jan. 17, data from the COMMODITY FUTURES TRADING Commission and calculations by Reuters show.
The Singapore dollar SGD= dipped with the yen on Thursday but is trading around its highest since mid-November. The Korean won hit its highest since Nov. 10 in Asian trading. KRW= Mexico’s peso MXN=D2 strengthened to a three-week high of 20.9300 pesos on Wednesday.
DollarAmong the group of G10 developed world currencies, the biggest gainer of the past fortnight has been sterling, up almost 6 percent from troughs hit on Jan. 16. All eyes were on fourth-quarter GDP data, Reuters reports.
