Monitoring Desk
ISLAMABAD/SINGAPORE: The dollar surged on Friday to hit a six-week increase against the basket of currencies as a bout of resilient economic data out of the United States (US) raised market expectations that more interest rate hikes were in the offing.
Data on Thursday showed that the number of Americans filing new claims for unemployment benefits unexpectedly fell the previous week, while other data revealed that monthly producer prices raised by the most in seven months in January.
United States dollar
The latest data releases gave the United States (US) dollar a leg up, knocking sterling to a fresh six-week low of 1.1952 dollars on Friday.
A kiwi tumbled to a six-week trough of 0.6228 dollars while the euro bottomed at 1.0652 dollars, its lowest since Jan. 9.
Against a basket of currencies, the United States dollar index rose to a fresh six-week top of 104.31 and was on track for a third straight week of gains.
“The United States economy, from recent data, shows that it’s still healthy. It doesn’t seem to be going into recession any time soon,” said Tina Teng, market analyst at CMC Markets.
“The markets are pricing for increase-for-longer rates.”
Thursday’s report followed information from earlier this week, which showed robust growth in American retail sales in January and signs of sticky inflation, stoking fears the Federal Reserve would have to increase rates higher than lastly expected.
U.S. Treasury yields have surged on further hawkish rate repricing, with the two-year yields last at 4.6762%.
