Dollar falls for first week in seven amid U.S. yield retreat

Friday,   20-May-2022   07:56 AM (IST)

The U.S. dollar headed for its worst week since early February against major peers on Friday, weighed down by a retreat in Treasury yields and fatigue after the currency’s breathless 10%, 14-week surge. The dollar index, which measures it against six major rivals, was down 1.5% for the week to 102.96, on track to snap a six-week winning run. A week earlier it had soared to the highest since January 2003 at 105.01. Even with global stocks continuing to slide amid risks to growth from aggressive monetary tightening, led by the Federal Reserve, and China’s strict lockdowns to quash a COVID-19 outbreak, the dollar’s appeal as a haven was eclipsed by a decline in U.S. yields as investors rushed for the safety of Treasury bonds. The benchmark 10-year Treasury yield sank overnight to a more than three-week low of 2.772%, from a 3 1/2-year high of over 3.2% earlier this month. Other safe haven currencies continued to rally overnight, as a key index of global equities headed for a seventh weekly decline, its longest ever. The yen headed for a second-straight weekly advance, with the dollar dropping 1.16% to 127.785 yen since last Friday.