Dollar poised for steep weekly fall, yen trades below 150
By Herbert Lash and Iain Withers
NEW YORK/LONDON (Reuters) -The dollar headed toward one of its steepest weekly declines versus other major currencies this year on Friday, while the yen strengthened sharply to trade below 150 to the dollar as concerns grow about the weakening global economic outlook.
Cooler-than-expected U.S. inflation data on Tuesday and Wednesday reset market expectations for how soon the Federal Reserve will cut rates and weighed on the dollar. The greenback is poised for its biggest weekly drop since July, down 1.6% over the past five days, and second-biggest decline this year.
Data that showed U.S. single-family homebuilding increased marginally in October briefly supported the dollar, but with inflation the main market driver it remained lower on the day.
«The spate of recent data points towards progress being made on the inflation front,» said Bipan Rai, North America head of FX strategy at CIBC Capital Markets in Toronto. «It really feels like the initial momentum now is for the dollar to move lower.»
The dollar index, which measures the greenback against six other major currencies, fell 0.31%
«Everything is pointing towards a fourth quarter slowdown in the United States,» said Thierry Wizman, global FX and interest rate strategist at Macquarie in New York, adding that a key signal would be companies guiding growth expectations lower.
«They're not seeing the pricing power they saw in Q3 and they're not seeing the kind of enthusiasm on the part of customers that they were seeing in Q3 either,» Wizman said.
The euro was up 0.29% to $1.0881 after Eurostat data confirmed year-on-year inflation in the euro zone slowed sharply in October.
The yen — which has been punished broadly by dollar strength
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