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Title: Dollar Up, but Near One-Week Low, as Fed Decision Impact Continues

Mar 17, 2022 11:38PM ET

By: AnalysisWatch

The dollar advanced in Asia on Friday morning, but posted its first weekly decline in six years and remained near a one-week low as the fallout from the Federal Reserve's latest monetary policy decision continues.

The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, rose 0.15% to 98.120 at 11:30 PM ET.

The USD/JPY pair rose 0.16% to 118.78.

The pair AUD/USD fell 0.01% to 0.7373, while the pair NZD/USD rose 0.01% to 0.6880.

The USD/CNY pair rose 0.18% to 6.3584 and the GBP/USD pair gained 0.05% to 1.3153.

The dollar's losses were offset by the gains of the euro, which was little changed at $1.10885 on Friday but gained 1.67% over the week. Hopes rose for an end to the conflict, which stems from Russia's invasion of Ukraine on February 24. Talks between the two countries continue, but Thursday's progress was elusive. The fact that Russia avoided a default on its dollar debt also helped improve sentiment.

US President Joe Biden and his Chinese counterpart, Xi Jinping, will speak later today, and Biden is expected to warn China not to support Russia.

The dollar index is expected to continue to head towards 100 and above as the US Federal Reserve's rate hike cycle continues, the note added. The US currency took a breather and was set for a loss of 1.09% in the session. The greenback fell for the first time since March 10 to 97.724 on Thursday.

The Bank of Japan also left its interest rate at -0.10% as it announced its monetary policy decision earlier in the day. The growing rift between Japanese and US policy sent the yen to a six-year high of 119.13 on Wednesday. The yen faces a weekly decline of 1.15% after falling 2.26% in the previous session, the most in two years.

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