The dollar index, a unit of measurement against six major currencies, is down 1.42% on the week, on track to break a six-week streak of gains. Last Friday, it had reached its highest level since January 2003, at 104.91. Although global equities fell this week on growth risks from the Federal Reserve's aggressive monetary tightening and China's strict containment measures to combat the COVID-19 outbreak, the dollar's appeal as a safe haven was overshadowed overnight by a drop in US yields as investors rushed to the safety of Treasury bonds. The benchmark 10-year Treasury bond yield fell to 2.772% on Thursday, its lowest level in more than three weeks, after hitting a high of more than 3.2% at the start of the month. Investors are increasingly concerned that the Fed and other central banks have fallen behind in the fight against runaway inflation and that they must be increasingly aggressive in tightening their policy, which will have the effect of penalizing the economy.
The yen edged higher on Friday, heading for a second straight weekly gain while the Swiss franc heads for its best week since March 2020. The war in Ukraine shows no sign of abating, which dims the outlook for commodity price-driven inflation.
China still unsure how to break out of coronavirus lockdown, which risks increasing price pressures globally, even as Shanghai moves to allow more businesses into coronavirus-free areas to resume normal activities from the beginning of June and that it's ports are now operating at 90% of their capacity.
A new French government will be announced this afternoon after Emmanuel Macron appointed Emmanuelle Borne as his first prime minister of his second term.
Cable went slightly up yesterday as the US dollar suffered from a decrease in 10-year Treasury bond yield and concerns about inflation.
GBPUSD opened at 1.2426 and close slightly under 1.2460.
GBPEUR remained stable yesterday with a very slight loss. The pair opened at 1.1806 and closed at 1.1797
EURUSD also saw the euro gain strength as the dollar lost momentum with the pair opening at 1.0520 and closing at 1.0581.
