Posted by Kevin Buckland
TOKYO (Reuters) – The dollar was on its way to its worst straight weekly decline this year as government bond yields continued to decline from more than a year high as investors became increasingly committed to the Federal Reserve's insistence on continued monetary support .
The benchmark fell to a monthly low of 1.528% overnight, from 1.776% late last month, even given the unexpectedly strong retail sales and employment data on Thursday.
San Francisco Fed President Mary Daly said the same day that the US economy is still a long way from making "substantial headway" in meeting the central bank's targets of 2% inflation and full employment. This is the bar the Fed has set for considering reducing its support for the economy.
The one that tracks the greenback versus six big competitors fell to a nearly month-long low of 91.487 overnight before rebounding somewhat to 91.678 at the start of the Asian session.
A decrease of 0.6% is assumed for the week, which extends the decrease of 0.9% compared to the previous week.
The bar, also known as DXY, rose on the final day of March with government bonds falling to a nearly five-month high of 93,439, as it was bet that massive budget spending combined with continued monetary easing would fuel US economic growth and higher inflation become .
But the bond and currency markets now seem poised to give the Fed the benefit of the doubt that inflationary pressures will be temporary and that monetary stimulus will remain in place for years to come.
The dollar "is still struggling to gain a foothold in April, although the US macro outperformance narrative couldn't be cheaper," Westpac strategists wrote in a research report.
"The DXY is acting as it is coming up now, earlier than (we) expected."
Retail sales rose 9.8% last month, beating economists' expectations for a 5.9% increase, while first-time unemployment benefits fell to their lowest level in more than a year last week, according to separate Reports on Thursday showed.
The dollar was trading at 108.68 yen, down 0.9% for the week, roughly the same as the previous week.
The euro changed hands at $ 1.1964, a weekly advance of 0.5%, adding to the 1.3% increase in the previous period.
Cryptocurrencies were valued at $ 63,478, close to the record high of $ 64,895 reached on Wednesday when the cryptocurrency platform Coinbase COIN.O debuted in a direct listing on Nasdaq.
The Russian ruble fell on Thursday, shedding 2% against the dollar once in volatile trading, and hitting a more than five-month low against the euro as the White House announced new sanctions on Russia's national debt.
US President Joe Biden on Thursday approved Moscow's punishment for meddling in the 2020 US elections, which Russia denies.
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