NEW YORK (Xinhua/ APP): The US dollar ended nearly flat in late trading on Friday, amid resilient US consumer and labor markets.
The dollar index, which measures the greenback against six major peers, was up 0.03 percent to 105.0866 in late trading, heading for eight straight weeks of gains, the longest such streak since 2014. Analysts and investors believe that positive economic data from the United States in recent weeks, along with a resilient economy, have helped boost the dollar’s value.
“We remain modestly positive for USD near-term despite finding it overvalued,” Bank of America analysts said in a report. “This is in line with the weaker eurozone data and, more broadly, our view that the market pricing of 2024 Fed cuts is excessive.” In the eurozone, the consumer price index (CPI) of Germany, Europe’s largest economy, remained unchanged in August for a third straight month. On a yearly basis, the CPI was confirmed at 6.1 percent year on year, down a notch from 6.2 percent, while core CPI remained unchanged at 5.5 percent year on year. Food and energy prices rose but there was a bit of good news as services inflation ticked lower to 5.1 percent, down from 5.2 percent in July.
Meanwhile, European and US stock markets advanced Friday despite lingering concerns about further aggressive central bank actions as natural gas prices jumped on news of a strike in Australia. Friday’s gains came at the end of a lackluster week for equities in the wake of persistently high Treasury bond yields. US economic data has generally outperformed expectations, raising hopes a recession can be avoided, but adding to worries of more Federal Reserve interest rate increases. “It seems that a lot of people are just waiting to see how quickly this economy cool,” said Oanda’s Edward Moya, who described the current stretch as “a little bit of a choppy period.”
The S&P 500 finished at 4,457.49, up 0.1 percent for the day but down 1.3 percent for the week. Among individual companies, Apple advanced 0.4 percent, a partial recovery after two straight losing sessions on worries over reports of a China ban on iPhones at government offices. Asian markets slid Friday, while European stocks pulled into positive territory during afternoon trading after a sluggish morning and closed higher.
“Investors are currently caught between two distinct pincers: concerns over slowing economic numbers, particularly in Europe and China, against a backdrop of much stickier inflation caused by rising energy prices,” said Michael Hewson at CMC Markets. Strong US readings — including on the services sector and jobs — and a surge in oil prices have sparked fears the Fed will announce one more hike before the end of the year or keep borrowing costs elevated for an extended period.
