The dollar was heading for a second week of declines on Friday as sentiment stayed tilted towards riskier assets, while an intervention by the Australian central bank put a halt to the Aussie dollar’s recent surge.
The dollar index was last at 93.733, little changed in Asian hours but off 0.24% on the week, as it continues its fall from a 12-month high of 94.565 hit in earlier this month.
On Friday, benchmark 10-year U.S. Treasury yields were at 1.6872%, slightly off from Thursday’s multi-month high of 1.7%, as markets continue to prepare themselves for an announcement by the Federal Reserve that it will start to wind down its massive bond buying programme, which is widely expected for November.
The British pound paused for breath at $1.3798, off a month peak hit earlier in the week, to which it had been carried by growing expectations of an interest rate hike to combat rising inflationary pressures.
The Bank of England will be the first major central bank to raise interest rates in the post-pandemic cycle but economists polled by Reuters think the first hike will not come until early next year, later than markets are pricing in.
The UK currency held momentum due to rising expectations of BoE rate hike.
British overnight indexed swaps are pricing in about 80% chance of a 0.25% rate hike on Nov. 4.
BoE chief economist says UK inflation could top 5% -FT
· China's yuan eases after regulator warn of possible actions to counter higher fluctuations
In the spot market, onshore yuan opened at 6.3921 per dollar and was changing hands at 6.3985 at midday, 65 pips weaker than the previous late session close.
The yuan touched a high of 6.3794 per dollar on Wednesday, the strongest level since June 2.
Thai
Eng