Dollar set for longest weekly winning streak since 2014, yuan plumbs 2007 low

London, Sept. 8 (BNA): The dollar headed on Friday for its longest weekly winning streak in nine years, bolstered by a resilient run of U.S. economic data that has put the end of the Federal Reserve’s aggressive rate-increase cycle into question.


China’s onshore yuan meanwhile ended its domestic session at the weakest since 2007, as it battles capital outflow pressures and a widening yield gap with major economies.


The U.S. dollar index , which measures the greenback against major peers, was last 0.05% lower at 105 but remained not far from the previous session’s six-month high of 105.15, according to Reuters.


The index was on track to extend its gains into an eighth straight week, and is up 0.7% thus far.


The euro, the largest component in the dollar index, was staring at eight straight weeks of losses, with the single currency last gaining 0.08% to stand at $1.0704, having fallen to a three-month low of $1.0686 on Thursday.


“The relative divergence of the U.S. and European economy is a key topic again and the weaker dollar story has just faded away,” said Dane Cekov, senior macro and FX strategist at Nordea Markets.


Data out this week showed the U.S. services sector unexpectedly gained steam in August and that jobless claims last week hit their lowest level since February, while in the euro zone, industrial production in Germany, Europe’s largest economy, fell by slightly more than expected in July.


“The U.S. economic data is still robust and in Europe it’s flattening out. The dollar usually does well when the U.S. economy outperforms peers and at the moment the U.S. is the bright spot,” said Nordea’s Cekov.

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Sterling edged away from Thursday’s three-month low and last bought $1.2480, though was still set to clock a weekly loss of more than 0.8%.


 


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