NEW YORK- The dollar slipped from 20-year highs against a basket of currencies on Friday, but posted the best month in seven years as concerns about the global economy and a hawkish Federal Reserve bolstered demand for the greenback.
The dollar hit a 20-year high against the yen on Thursday, as the Japanese currency was hurt by dovish Bank of Japan policy. It also hit a five-year high against the euro, which has dropped sharply since Russia’s invasion of Ukraine, with investors concerned about Europe’s energy security, inflation and growth.
The greenback gave back some of those gains on Friday as investors took profits, but still ended the month strong.
“We’ve seen some broad-based dollar strength,” said VassiliSerebriakov, an FX strategist at UBS in New York. “There is a general story, which has more to do with concerns about the global cycle and that helps the dollar through risk aversion, but then there are some idiosyncratic stories like dollar/yen.”
Concerns about global growth have increased as China enacts lockdowns in a bid so stop the spread of COVID-19.
China’s capital Beijing closed more businesses and residential compounds on Friday, with authorities ramping up contact tracing to contain a COVID-19 outbreak, while resentment at the month-long lockdown in Shanghai grew.
The dollar index against a basket of currencies was last 102.94, after reaching 103.93 on Thursday, which was the highest since Dec. 2002. It is up 4.76 percent on the month, the biggest gain since Jan. 2015.
The yen was 129.32, after reaching 131.24 on Thursday, the weakest since April 2002. The dollar gained 6.41 percent against the Japanese currency in April, the best month since Nov. 2016. — Reuters
