Forex News: Dollar Extends Gains As 2024 Draws To A

Dollar Extends Gains As 2024 Draws To A Close

(RTTNews) - Driven by caution ahead of the year-end, the U.S dollar inter alia gained against the euro, the Japanese yen, the Australian dollar, the Canadian dollar as well as the Swiss franc for the week ended December 27. The greenback however edged down against the British pound and the Swedish krona.

The six-currency Dollar Index which measures the Dollar's strength against a basket of 6 currencies gained 0.35 percent during the week ended December 27. The index ranged between the low of 107.68 recorded on Monday and the high of 108.30 recorded on Thursday. The Fed's recent hawkish tilt and its guidance about a slower-than-expected rate cut trajectory has been a source of strength for the Dollar, lifting the Index 0.58 percent during the week ended December 20. The index had gained 0.89 percent during the previous week ended December 13.

Data released by the U.S. Census Bureau on Monday had shown new orders for manufactured durable goods in the U.S. decreasing 1.1 percent month-over-month in November. This compared with an upwardly revised 0.8 percent rise in October and much worse than market forecasts of a 0.4 percent decline.

Data released by the U.S. Department of Labor on Thursday showed initial jobless claims in the U.S. unexpectedly easing to 219 thousand in the second week of December. Markets had expected the same to rise to 224 thousand from 220 thousand in the previous week. The data reinforced the Fed's concerns that inflation was a bigger worry for the Fed than a softening labor market, strengthening the Dollar.

The U.S. dollar edged up 0.02 percent against the euro during the week ended December 27 amidst uncertainty regarding the European Central Bank's rate cut plans. From the level of 1.0429 on December 20, the EUR/USD pair edged down to 1.0427 by December 27. The weekly trading ranged between the high of 1.0446 recorded on Monday and the low of 1.0383 touched on Monday as well as Tuesday.

The sterling gained 0.08 percent against the greenback during the week ended December 27 amidst data that showed that the British economy stalled in the third quarter of 2024 versus a downwardly revised 0.4 percent in the second quarter. The GBP/USD pair rose to 1.2579 on December 27, from 1.2569 a week earlier. The sterling's weekly trading range was between $1.2500 recorded on Thursday and $1.2594 recorded on Friday.

The Australian Dollar plunged 0.56 percent against the greenback during the week ended December 27 that saw the release of the minutes of the recent meeting by Reserve Bank of Australia. According to the minutes, the members judged the upside risks to inflation to have diminished. The members also noted that monetary policy needed to be sufficiently restrictive until members are confident that inflation was moving sustainably towards the target. It was also acknowledged that they had gained confidence about this since the previous meeting. From the level of 0.6250 recorded on December 20, the AUD/USD pair dropped in a week's time to a low of 0.6215, not far from the 52-week low of 0.6198. The pair touched a high of 0.6271 on Monday and a low of 0.6200 on Friday.

The USD/JPY pair slipped 0.90 percent during the week ended December 27 as it closed at 157.82 versus 156.41 a week earlier. The pair ranged between the low of 156.33 on Monday and the high of 158.11 on Thursday. Data released on Friday which showed an uptick in the Tokyo CPI readings capped the yen's losses. With no clear hints of a rate hike coming from the Bank of Japan's Summary of Opinions released on Thursday or from key officials of Bank of Japan, the yen had weakened over the course of the week.

Amidst thin holiday trade, the Dollar Index has eased to 107.86. The EUR/USD has rallied to 1.0442 whereas the GBP/USD pair has increased to 1.2592. The AUD/USD pair has rebounded to 0.6229. The USD/JPY pair has weakened to 157.64.

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