The dollar edged higher in early European trade Friday, continuing to benefit from Wednesday’s surprise move by the Federal Reserve in bringing forward its timetable for raising interest rates.
At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded less than 0.1% higher at 91.933, after earlier hitting a more than two-month high above 92. The index is on course for a weekly gain of 1.5%, its largest since September.
USD/JPY dropped 0.1% to 110.06, after climbing to a 11-week high of 110.82 on Thursday, EUR/USD was largely unchanged at 1.1906, just above a two-month low, GBP/USD was down 0.1% at 1.3904, around a six-week low, and the risk-sensitive AUD/USD was down 0.2% at 0.7536, near a two-month low.
The dollar is still reaping the rewards of the U.S. Federal Reserve, the country’s central bank, taking a more hawkish stance than expected and planning for two interest rate increases of 25 basis points in 2023, a year earlier than expected.
Australia stocks were higher after the close on Friday, as gains in the IT, Consumer Discretionary and Telecoms Services sectors led shares higher.
At the close in Sydney, the S&P/ASX 200 gained 0.13%.
The best performers of the session on the S&P/ASX 200 were Zip Co Ltd (ASX:Z1P), which rose 9.85% or 0.73 points to trade at 8.14 at the close. Meanwhile, Mesoblast Ltd (ASX:MSB) added 7.91% or 0.170 points to end at 2.320 and Pointsbet Holdings Ltd (ASX:PBH) was up 7.40% or 0.93 points to 13.50 in late trade.
The worst performers of the session were Santos Ltd (ASX:STO), which fell 3.55% or 0.270 points to trade at 7.340 at the close. Newcrest Mining Ltd (ASX:NCM) declined 2.95% or 0.790 points to end at 25.960 and Oil Search Ltd (ASX:OSH) was down 2.89% or 0.120 points to 4.030.
Rising stocks outnumbered declining ones on the Sydney Stock Exchange by 736 to 592 and 425 ended unchanged.
Oil prices fell for a second straight session on Friday as the U.S. dollar soared on the prospect of interest rate hikes in the United States, but they were on track to finish the week little changed and only slightly off multi-year highs.
Brent crude futures were down 45 cents, or 0.6%, at $72.63 a barrel as of 0700 GMT, extending a 1.8% decline on Thursday. The contract is on track to be flat for the week.
U.S. West Texas Intermediate (WTI) crude futures were down 33 cents, or 0.5%, at $70.71 a barrel, after retreating 1.5% on Thursday. WTI is heading for a slight decline, which would be the first drop in four weeks.
On Wednesday, Brent settled at its highest price since April 2019 while WTI settled at its highest since October 2018.
The dollar has rocketed in the two sessions since the U.S. Federal Reserve projected possible rate hikes in 2023, earlier than market watchers previously expected. A rising dollar makes oil more expensive in other currencies, curbing demand.
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