Daily Afternoon Report 21.10.2016

Daily Afternoon Report 21.10.2016

The dollar extended gains and hit an eight-month peak against the other majors currencies on Friday, as hopes for a U.S. rate hike before the end of the year continued to boost demand for the greenback.

EUR/USD dropped 0.41% to a fresh seven-month trough of 1.0883.

The dollar remained broadly supported after New York Fed President William Dudley said on Wednesday that the U.S. central bank will likely raise interest rates later this year if the economy remains on its current trajectory.

Meanwhile, sentiment on the euro was fragile after European Central Bank President Mario Draghi said on Thursday that an adjustment to the bank’s stimulus program could come in December and that its assessment would benefit from new economic projections to be drawn up by ECB forecasters.

GBP/USD declined 0.61% to 1.2178. The U.K. Office for National Statistics earlier reported that public sector net borrowing rose by £10.12 billion in September, compared to expectations for an increase of only £8.20 billion.

Public sector net borrowing rose £10.33 billion in August, whose figure was revised from a previously estimated gain of £10.05 billion.

USD/JPY edged down 0.17% to 103.75, while USD/CHF rose 0.23% to 0.9951.

Earlier Friday, Bank of Japan Governor Haruhiko Kuroda said the central bank may push back the timing for hitting its inflation target.

Kuroda did not indicate how such a delay could affect the BOJ’s policy decision, but he said that the bank’s bond purchases may slow in the future if 10-year bond yields fall well below its target of around zero percent.

The Australian dollar was steady, with AUD/USD at 0.7625, while NZD/USD retreated 0.43% to 0.7162.

Meanwhile, USD/CAD added 0.10% to trade at 1.3237, the highest since October 13.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.32% at 98.60, the highest since February.