The start of European session trading saw the greenback dollar depreciate which may be influenced by profit -taking by investors ahead of weekend trading.
At the time of writing, the dollar index slipped from a 20 -year high by trading at 104.50 against a basket of major currencies.
Even so, fundamental factors still support the US dollar to maintain its strength amid the absence of major economic data except the US consumer sentiment index for May which will be released in the New York session.
Meanwhile, the yen is on track to end losses suffered 9 weeks in a row as the gloom of global growth prospects has helped boost the safe-haven this week.
Revealing the factors influencing the market this week, expectations of interest rate hikes by central banks especially the Federal Reserve (Fed) have raised concerns over global growth.
U.S. inflation remained at a 40 -year high in April despite recording a slight decline from March, which showed the Fed will continue to implement hikes to combat price surges.
The euro, meanwhile, slipped to a 5 -year low following the strength of the US dollar, but European Central Bank (ECB) policymakers increasingly highlighted the need for an immediate rate hike.
Moreover, the pound continued to sink following slow UK growth in March, thus supporting the Bank of England’s (BOE) warning that the country’s economy faces the risk of a recession.
