Dollar snaps losing streak and ends higher on profit-taking

The greenback snapped its recent losing streak and gained across the board on Friday as investors booked profits together with a rebound in global stocks.  
  
Reuters reported the Federal Reserve, which earlier this week unveiled its biggest interest rate hike in more than a quarter of a century, on Friday signaled it will not let anything stand in the way of its battle to bring down the searing inflation that's punishing American households. "The Committee's commitment to restoring price stability - which is necessary for sustaining a strong labor market - is unconditional," the Fed said in its twice-yearly monetary policy report to Congress, referring to the U.S. central bank's rate-setting Federal Open Market Committee. The report's use of the word "unconditional" suggests that the Fed is willing to risk just that, in order to avoid what it sees as a far worse situation where inflation gets out of control and exerts far more damaging long-term harm.  
  
Versus the Japanese yen, traded with a firm bias before rising to 134.62 in Asian morning after Bank of Japan's rate decision. The pair then spiked down to 132.35 before rebounding to 134.30 in volatile trading. Dollar then continued to ratchet higher to 134.91 in European morning, then higher to an intra-day high at 135.42 in New York morning on usd's strength before reteating on profit taking, price last traded at 134.94 near the close.  
  
Sources from Reuters said  the Bank of Japan maintained its massive stimulus on Friday and its guidance to keep borrowing costs at "present or lower" levels, signaling its resolve to focus on supporting the economy's recovery from the COVID-19 pandemic. The central bank also said it would offer to buy unlimited amounts of 10-year Japanese government bonds (JGB) at 0.25% every business day, repeating the guidance on market operations it made in April. As widely expected, the central bank kept unchanged its short-term interest rate target at -0.1% and a pledge to guide the 10-year government bond yield around 0%. The decision was made by a 8-1 vote.  
  
The single currency remained under pressure in Asia after Thursday's rally to 1.0601 after ECB's statement and retreated to 1.0495 in early European morning. Euro then met renewed selling at 1.0535 in Europe and fell to session lows at 1.0445 in New York morning on usd's strength before recovering to 1.0502 on short covering.  
  
The British pound also remained under pressure and weakened to 1.2253 in early European morning before bouncing to 1.2343. The pair then met renewed selling and fell to an intra-day low at 1.2174 in New York on usd's strength together with cross-selling of sterling especially vs euro.  
  
Data to be released this week:  

New Zealand business NZ PSI, Germany producer prices, EU construction output and U.S. Market Holiday on Monday.  
  
New Zealand Westpac consumer survey, GDT price index, U.K. Rightmove house price, CBI trends orders, Swiss exports, imports, trade balance, EU current account, Canada new housing price index, retail sales, U.S. national activity index and existing home sales on Tuesday.  
  
New Zealand Westpac consumer survey, imports, exports, trade balance, Australia Westpac leading index, U.K. CPI, RPI, PPI input prices, PPI output prices, DCLG house price index, US mortgage application, redbook, Canada CPI and EU consumer confidence on Wednesday.  
  
Australia manufacturing PMI, services PMI, Japan Jibun bank manufacturing PMI, Jibun bank services PMI, U.K. PSNB, PSNCR, S&P manufacturing PMI, S&P global services PMI, France business climate, S&P manufacturing PMI, S&P global services PMI, Germany S&P manufacturing PMI, S&P global services PMI, EU S&P manufacturing PMI, S&P global services PMI, U.S. current account, initial jobless claims, continuing jobless claims, U.S. S&P manufacturing PMI, S&P global services PMI and KC Fed manufacturing PMI on Thursday.  
  
New Zealand Market Holiday, U.K. Gfk consumer confidence, retail sales, Japan nationwide CPI, Italy business confidence, trade balance, consumer confidence, Germany Ifo business climate, Ifo current conditions, Ifo expectations, U.S. building permits, University of Michigan sentiment, new home sales on Friday and Canada average weekly earnings on Friday.