US dollar up moving towards its first weekly decline in 2024

The dollar is set to record its first weekly decline in 2024 on Friday as investors catch their breath after declining expectations that the Federal Reserve will cut interest rates soon led to a rise in the US currency.

According to Reuters, the yen has declined and is heading towards its fourth weekly decline as investors seek to benefit from better returns almost everywhere except Japan, where interest rates will remain near zero for some time.

The dollar has rebounded this year thanks to strong economic data and warnings from Federal Reserve officials that the battle against inflation is far from over, supporting expectations that interest rate cuts will be delayed until June or later in the year.

The dollar index rose 0.06% to 103.96 points, but is heading towards the first weekly decline since December by about 0.28%, while the euro stabilized in the latest trading at $1.0823.

The yen fell 0.8% against the euro this week, touching its lowest level in 3 months on Thursday at 163.45 per euro. The dollar increased 0.15% to trade at 150.75 yen this week.

Investors can benefit from the variation in interest rates, through what is called carry trading, by borrowing in yen at about 0% and purchasing income-generating assets in other currencies.

The Chinese yuan has recorded stable performance since the Lunar New Year holiday, and barely moved this week from the level of 7.1959 to the dollar despite the sharp cuts in mortgage interest rates in China.