Dollar Struggles After Central Banks’ Plans to Halt Stimulus

The dollar remained under pressure on Friday at the end of a week in which major central banks revealed plans to halt their pandemic-era stimulus as the Bank of England surprised markets with an interest rate hike.

After a turbulent week, the dollar index, which measures its price against a basket of six currencies, was little changed on Friday and settled at 96.005, while the euro and the pound sterling consolidated their gains in the previous two days, reaching $1.13310 and $1.33130, respectively.

The dollar index has lost about 1 percent since Wednesday, when the Federal Reserve said it would end its bond-buying program in March, paving the way for three quarter-point interest rate hikes next year.

On Thursday, the Bank of England became the first G7 economy to raise interest rates since the outbreak of the Corona pandemic, while the European Central Bank announced the end of its emergency asset purchase plan in March.

The yen rose 0.1 percent to 113.55 yen to the dollar and the Swiss franc also rose 0.1 percent on Friday to 0.91815 against the dollar.