The dollar rises as it recovers from oversold condition
The US dollar saw significant gains on Friday for the third day in a row, as the euro moved away from its 5-month high, as markets suffer from escalating global trade tensions and the risks of a sharp economic slowdown.
US President Donald Trump has also threatened to impose 200% tariffs on imports of wine, cognac and other alcoholic beverages from Europe.
Similarly, the European Union announced plans to impose tariffs on US products next month, in response to US tariffs on steel and aluminum imports.
Euro against the US dollar
The euro fell to 1.0846 US dollars after retreating from a five-month high set last Tuesday, after the trade conflict between the EU and the US markets, and Germany also had difficulty approving a huge spending proposal.
Hopes for a ceasefire between Ukraine and Russia also faded, as Russia announced its support for the US proposal, but noted that it would need serious amendments.
DXY
The decline of the euro helped to raise the US dollar index, which measures the value of the US currency against a basket of currencies, as the US dollar index rose to reach 104 levels today, heading towards gains for the third day in a row, despite growing concerns about the prospects for the US and global economy in general.
Dollar vs. Japanese yen
The yen fell against the US dollar this week, after some reports indicated that the Bank of Japan is in no hurry to raise interest rates next May, as a large part of market traders were betting on a rate hike in May.
The results of the first round of Japanese spring wage negotiations are also due later in the day, and the negotiations are expected to result in wage increases of about 5.3%, in line with market expectations and the Bank of Japan's forecasts.
As this is what will support the Bank of Japan in the medium term, but it cannot be a reason to raise interest rates at its May meeting.
British pound against the US dollar
The British pound against the US dollar also fell to about 1.2920 with the release of GDP data for January, which fell more than expected to -0.1%, and we still expect a further decline for the pound sterling against most currencies.
