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Dollar index continues to slip but remains close to 14-year peak

Published 12/16/2016, 05:22 AM
© Reuters.  Dollar still on the downside vs. rivals, but hovers near 14-year highs
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Investing.com - The dollar continued to fall against the other majors currencies on Friday, as investors locked in profits from the greenback’s rally to fresh 14-year highs following the Federal Reserve’s decision to raise interest rates for the first time since December 2015.

EUR/USD gained 0.46% to 1.0462, off the previous session’s 14-year low of 1.0363.

The greenback found broad support after the Fed concluded its policy meeting on Wednesday by raising interest rates by 25 basis points and projected three more rate hikes for 2017.

The dollar was also boosted after the U.S. Labor Department reported on Thursday that initial jobless claims fell to 254,000 last week.

A separate report showed that the U.S. consumer price index rose 0.2% last month, in line with expectations. Year-on-year, consumer prices increased by 1.7%.

In addition, the Philly Fed manufacturing index climbed to a two-year high of 21.5 this month from 7.6 in November, blowing past expectations for a reading of 9.0.

Elsewhere, GBP/USD held steady at 1.2426, after falling to a three-week trough of 1.2372 on Thursday.

The pound remained mildy supported after the Bank of England’s decision to keep interest rates at a record low of 0.25% and the bank's bond-buying program target at £435 billion.

USD/JPY slipped 0.14% to 118.02, while USD/CHF shed 0.22% to 1.0275.

The Australian dollar was weaker, with AUD/USD down 0.20% at 0.7343, while NZD/USD was little changed at 0.7032.

Meanwhile, USD/CAD eased up 0.08% to trade at 1.3348.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.33% at 102.83, still close to the previous session’s 14-year high of 103.56.

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