Dollar off 10-month high, yen still under intervention watch
dollar held off a 10-month high on Friday as markets headed into the end of the quarter, giving the yen slightly more breathing room at the end of the week amid intervention concerns.
The euro largely held its ground after rebounding overnight, but was still not far from its January low of $1.0482, which if broken would be the lowest since December.
The dollar index, which tracks the currency against six other majors, was mostly flat in the Asian morning, on track for an 11th straight week of gains, after dipping as low as 106.020 overnight.
The dollar gained on expectations that the U.S.
economy would remain more resilient to higher interest rates than other economies, after the Federal Reserve last week warned that it may raise rates further and is likely to hold them high for longer.
U.S. Treasury yields, which had been lending support to the dollar's rise, fell from multi-year highs overnight, as technical factors kicked in to stall their surge.
At the same time markets look ahead to key PCE data released later on Friday, the U.S.
appears to be headed toward a partial government shutdown, which could affect the release of economic data, providing little visibility on how the economy is doing.
That could create a «vacuum of uncertainty» as the Federal Reserve tries to determine whether another rate increase is needed this year, said Tony Sycamore, market analyst at IG.
«When we've got central banks that are data dependent… and they can't get that data in a timely fashion, it does, I think, create another reason to move to the sidelines in some of these asset classes,» Sycamore said.
Richmond Fed President Thomas Barkin on Thursday said it's unclear whether more monetary policy changes will be needed in coming
