The U.S. dollar, on Friday, January 27, soared to a one-week high against the yen on hopes U.S. President Donald Trump’s pro-growth policies will further bolster the economy, and a key index of global equity markets slipped as investors paused after a recent rally.
The greenback has climbed for two straight days, pulling it back from seven-week lows against a basket of major currencies, on the view it would gain from a rise in border tariffs, tax reform and future spending.
U.S. Treasury debt yields slipped as data showing disappointing U.S. economic growth in the fourth quarter spurred buying of U.S. government debt, while oil prices retreated as investors focused on production increases in the United States.
The dollar pared some gains after data showed U.S. economic growth slowed more than expected to 1.9 percent in the fourth quarter due to weak exports.
Latin American currencies strengthened after the U.S. GDP data damped expectations of a fast rate-hiking cycle in the coming months.
The Mexican peso, which slumped on Thursday after the White House said Trump wants a 20 percent tax on imports from Mexico to pay for a wall on their shared border, strengthened around 1 percent.
The dollar was up 0.51 percent against the yen to 115.1 and was up 0.2 percent to 100.58 against a basket of six major currencies, Reuters reports.
On Wall Street, stocks were slightly lower at the open as investors took a breather following the Dow Jones Industrial Average’s three-day winning streak spurred by pro-growth optimism and rosy corporate earnings.
“The market has had a strong, solid rally and there’s a pause to evaluate and react to the next set of data and other catalysts that could move the market,” said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.
The Dow Jones Industrial Average fell 12.68 points, or 0.06 percent, to 20,088.23, the S&P 500 lost 2.52 points, or 0.11 percent, to 2,294.16 and the Nasdaq Composite dropped 1.30 points, or 0.02 percent, to 5,653.88.
