The U.S. dollar was set Friday to clinch its biggest weekly advance since February as it shrugged off a trifecta of threats, including percolating de-dollarization fears, the looming debt-ceiling showdown and a spate of alarming economic reports.
The index is now up 1.5% on the week at 102.68, its biggest such gain since September, when the index was still trading at or near its highest level in two decades.After declining during six of the past seven months, the dollar’s sudden turnaround over the past week has caught the attention of currency and equity strategists, who are waiting to see if the safety-trade momentum that propelled the dollar higher in 2022 has returned.
He noted that the Japanese yen USDJPY and Swiss franc USDCHF , two other currencies that typically benefit from investors’ aversion to risky assets, have also fared well recently. To be sure, some longtime currency strategists posited that the U.S. dollar’s latest rebound is merely a product of overcrowded bets in favor of the euro, and that the greenback remains overvalued.