© Reuters. Dollar loses ground vs. rivals after North Korean threats
Investing.com — The dollar moved lower against other major currencies on Friday, despite the recent optimistic US data and the possibility of a further interest rate increase by the Federal Reserve this year, as tensions between the US and North Korea showed up again.
The dollar strengthened broadly after the Fed indicated on Wednesday that a further interest rate increase is likely this year and said it will be 4.5 trillion balance sheet will begin to relax $in October.
The greenback was also supported by a number of good reports U.S. initial claims for unemployment benefits and manufacturing activity in Philadelphia, released on Thursday.
But the market sentiment weakened after the North Korean leader, Kim Jong-Un, said on Friday that Pyongyang about the «highest level of hard-line action in history» against the United States in response to President Donald Trump’s threat to destroy the country.
Shortly after North Korea’s foreign Minister Ri Yong Ho said his country could fuel the implementation of a water-bomb test in the Pacific ocean of an unprecedented scale.
In his first speech before the General Assembly of the United Nations on Tuesday, Trump said: «the United States has great strength and patience, but to defend if it is forced themselves and their allies, we have no choice, but to destroy completely, North Korea.»
The safe-haven yen and Swiss franc were higher, with USD/JPY sliding 0.37% to 112.03, from the previous session, the two-month-high of 112.72, while USD/CHF fell 0.20% to trade 0.9688.
Elsewhere, GBP/USD up 0.23% to 1.1969, while GBP/USD held stable at 1.3591, not far from Monday’s 15-month high of 1.3620.
Market participants were looking ahead to a string of data on manufacturing and service sector data from the euro zone, due later on Friday.
Investors were also planned in two separate speeches by the President of the European Central Bank, Mario Draghi, and the British Prime Minister, Theresa May, eyeing later in the day.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, wasdown 0.21% 91.78 02:15 PM ET (06:15 GMT),Thursday, a week with highs of 92.42.