A pullback in the U.S. dollar earlier this week was credited with helping to lift a rallying stock market, but one strategist isn’t convinced U.S. currency has peaked.
The dollar extended its losses against other major currencies on Thursday after data showed July wholesale prices cooled a day after encouraging headline consumer price index data. The ICE U.S. Dollar Index DXY , a measure of the currency against a basket of six major rivals, rose 0.6% on Friday but was on track for a 0.9% weekly fall.
The euro EURUSD breached $1.0350, “but we need a close above the $1.0380 level to target a run towards the 1.0530 100-day moving average,” he wrote. The DXY is heavily weighted toward the euro. On the flip side, according to Bechtel, it’s not the end of the euro’s weakness versus the dollar as Europe is planning to start winter with historically low amounts of natural gas and other fuels. The European Union sanctions on Moscow in response to the invasion of Ukraine in April have resulted in Russian exports of gas slowing through the Nord Stream 1 gas pipeline, the single largest link for Russian gas supplies to Europe.