Dollar set for best quarter in a year; yen intervention watch rumbles on
By Amanda Cooper
LONDON (Reuters) — The dollar continued to eased from a 10-month high on Friday, but was still headed for its biggest quarterly gain in a year, giving the yen some breathing room as intervention watch intensified.
The dollar index, which tracks the U.S. currency against six others, fell 0.4% to 105.75, but was on track to end the quarter up 2.8%, along with an 11th straight weekly rally — its longest in nine years.
U.S. Treasury yields, which were supporting the dollar, fell from multi-year highs overnight, a factor that, along with a 27% surge in the oil price this quarter, has helped the dollar turn positive for the year against virtually every major currency.
«We've had resilience in the U.S. economy, in the jobs market, inflation ticking higher and, obviously, the rise in oil prices. There's a lot in play here,» City Index markets strategist Fiona Cincotta said.
«We're not really expecting to see any rate cuts for quite some time, well toward the back end of 2024. And also, the Fed might not want to adopt a less hawkish tone, because they don’t want to unwind that work they’ve done too early,» she added.
Markets are looking ahead to the next data points, starting with key U.S. personal consumption data due later on Friday. However, a partial government shutdown is looming, which could affect the release of economic data.
A lack of data 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
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