NEW YORK- The dollar climbed on Friday and snapped a two-week streak of declines as a worldwide cyber outage that affected banks, airlines and broadcasters unnerved investors, although volatility in the currency markets was largely contained.
A software update by global cybersecurity firm CrowdStrike crippled industries from travel to finance before services started coming back online after hours of disruption, highlighting the risks of a global shift towards digital, interconnected technologies.
The dollar index was on track for its second straight daily advance, its first in two weeks, to put the greenback on pace for its first weekly gain in three, bouncing back on recent US economic data and concerns about the technology outage.
“It’s perhaps a result of the selling pressure earlier in the week, and at the tail end of last week, seeming rather over-done, particularly when one considers that US economic growth remains firm, and that while the Fed are set to cut in September, easing will still be relatively synchronized across G10 central banks,” said Michael Brown, market analyst at Pepperstone in London.
“Of course, the earlier tech issues may have sparked a bit of a flight to safety too, causing some knee-jerk dollar buying earlier in the day, with that strength then continuing into the afternoon session.”
The dollar index which measures the greenback against a basket of currencies, gained 0.24 percent at 104.39 and was up 0.3 percent on the week.
The Federal Reserve is scheduled for its next policy announcement at the end of July.
Markets expect only a slight chance for a cut of at least 25 basis points (bps), while almost completely pricing in a cut at its September meeting, according to CME’s FedWatch Tool.
