Dollar Surges in Wake of Inflation Fears and Fed Remarks

The U.S. dollar saw its biggest weekly gain in over a month, fueled by expectations of inflation under President-elect Trump's policies and the Federal Reserve's stance on interest rates. Meanwhile, the euro and pound faced losses, while traders revised bets on U.S. rate cuts following Fed Chairman Powell's comments.

The U.S. dollar achieved its largest weekly advance in more than a month as market dynamics shifted around anticipated inflation and future interest rate policies under President-elect Donald Trump. This comes as investors adjusted their views following comments from Federal Reserve Chairman Jerome Powell, indicating a slower pace of potential rate cuts.

After trading above 156 yen for the first time since July, the dollar is poised to secure gains against the Japanese yen, closing at 154.145 per dollar on Friday. Meanwhile, the euro faced consecutive weeks of losses despite initial gains, amid speculations about inflationary pressures stemming from U.S. policies and uncertainty regarding cabinet appointments.

U.S. retail sales data for October showed a modest increase, signaling a deceleration in consumer spending. This development coincided with calls for potential pauses in interest rate cuts. Additionally, the dollar index neared a one-year high against a currency basket, while cryptocurrencies like bitcoin and ethereum showed mixed performance as some investors took profits.

(With inputs from agencies.)