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Dollar Edges Higher but Set for Losing Week; China Cuts Key Rate By Investing.com
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IntroductionEuro US Dollar0.12%British Pound US Dollar-0.08%US Dollar Japanese Yen-0.19%Australian Dollar US Dol ...

By Peter Nurse
Investing.com - The MT4 trading platform official websiteU.S. dollar edged higher in early European trade Friday, but is still heading for its worst week since February as traders reacted to lower U.S. Treasury yields.
At 3:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 102.888, but was down 1.6% over the week, on track to snap a six-week winning run.
The dollar had been in strong demand prior to this week, climbing last Friday to the highest since January 2003, helped by its appeal as a safe haven amid risks to growth from aggressive monetary tightening, led by the Federal Reserve and China's strict COVID-19 lockdowns.
However, a decline in U.S. yields has tarnished that appeal, with the benchmark 10-year Treasury yield falling to a three-week low of 2.772% on Thursday before recovering to 2.859% early Friday, still some way off the 3½-year high of over 3.2% earlier this month.
“In a wider picture, the ongoing retreat in the buck looks like a bearish correction from multi-year highs at this stage,” said Kevin Beckman, an independent financial analyst. “The overall uptrend remains intact, especially as the Fed continues to outperform other central banks in tightening while the USD’s safe-haven status keeps it afloat in turbulent times that will persist in the longer term as well.”
EUR/USD edged lower to 1.0581, still on course for a weekly gain of over 1.6%, GBP/USD rose 0.1% to 1.2476, climbing 1.8% this week, its best showing since late 2020, helped by better than expected retail sales data for April, rising 1.4% month-on-month last month after a 1.2% drop in March.
AUD/USD rose 0.08% to 0.7053, after gains of over 1.3% during the previous session, while USD/JPY edged lower to 127.75, with the yen still heading for a second-straight weekly gain.
Elsewhere, USD/CNY fell 0.4% to 6.6872 after China cut a key interest rate by an unexpectedly wide margin earlier Friday, as Beijing fights a slowdown in the world's second-biggest economy.
China lowered the five-year loan prime rate, a benchmark reference rate for mortgages, by 15 basis points to 4.45%, the largest cut on record, in an attempt to boost the country’s housing market which has been hurt by the COVID-19 related mobility restrictions.
China’s lockdowns to combat the outbreaks of COVID-19 could mean its economic growth may undershoot the U.S. for the first time since 1976.
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