NEW YORK- The dollar index was down slightly but registered a gain for the week as investors expected the US Federal Reserve to remain aggressive when it hikes interest rates next week, while China’s yuan eased past the key threshold of 7 per dollar.
The dollar mostly held a slight gain following US data showing consumer sentiment improved moderately in September. The University of Michigan’s preliminary September reading on the overall index on consumer sentiment came in at 59.5, up from 58.6 in the prior month. Economists polled by Reuters had forecast a preliminary reading of 60.0 in September.
The dollar, measured against a basket of currencies, declined 0.1 percent on the day to 109.68. It reached a two-decade high of 110.79 earlier this month. For the week, it was up 0.6 percent, and it is up about 15 percent for the year so far.
“This belief that we’re very close to a peak dollar, very close to peak yields,… is getting pushed back. We’re seeing a lot of strong bullish dollar calls,” said Edward Moya, senior market analyst at Oanda in New York.
“That positioning will probably be strongly reflected post-FOMC next week.”
Investors expect a high chance of a 75-basis-point rate hike at next week’s meeting and some chance of a 100-bps increase.
In crypto markets, ether, the token used in the Ethereum network, hit its lowest level since late July, and was last down 2.8 percent. Bitcoin last fell 0.47 percent to $19,598.00.
Earlier, the rising dollar pushed the offshore yuan past the critical threshold of 7 per dollar for the first time in more than two years overnight.
