The United States Dollar, on Friday, June 30, was on course for its worst quarter in seven years, recovering only marginally against some of its major peers .
The greenback gained around 0.3 percent against the euro in morning trade in Europe, but was still down more than 8 percent on the quarter and 2 percent this week alone.
Compared with Thursday’s U.S. close against the basket of currencies that measures its broader strength it was steady. But it fell 0.2 percent against the yen as the Japanese currency recovered from its own losses this week.
The shift this week to price in rate rises in the months ahead by a number of central banks outside of the U.S. Federal Reserve has left both the dollar and the yen exposed, but a number of analysts wonder if the move has been overdone.
Data and several policy meetings over the next fortnight will be crucial, with Canadian releases a focus on Friday.
Helped by a recovery in oil, the Canadian dollar has pulled back to less than C$1.30 to its U.S. counterpart for the first time since January as investors priced in a 70 percent chance of a rise in rates on July 12.
“Odds for a 2017 BoC hike have ramped up considerably in recent days and this has been a major prop for the Loonie,” said LMAX Exchange analyst Joel Kruger.
“This week’s healthy recovery in (oil) has provided another excuse to pile into Canadian Dollar longs. There is every reason to expect another active session today.”
As well as GDP data on Friday, Canadian banks including RBC pointed to the need for the Bank of Canada’s Business Survey to support the positive rhetoric of officials in the past fortnight if the Canadian dollar was to hold onto its gains.
Sterling has also breached $1.30 this week with a hike in interest rates by December now 70 percent priced in. It was pushed back below that level by a quarterly rise in Britain’s huge current account deficit on Friday.
While the deficit was lower than consensus forecasts, it pointed to the risk that sterling will have to stay low, or go lower, to rebalance the economy as it heads into the uncertainty generated by the decision to leave the European Union.
