The U.S. dollar weakened sharply on Friday, heading for its steepest weekly loss since July, as renewed concerns over trade tensions and stress in U.S. regional banks pushed investors toward safe-haven assets such as the Swiss franc, the Japanese yen, and gold.
Uncertainty surrounding the U.S. economy has deepened, with the ongoing federal government shutdown halting the release of key economic data. The lack of reliable indicators has left investors uneasy about the true state of the economy, amplifying market volatility.
The Swiss franc reached its strongest level in a month, while the yen advanced, buoyed in part by comments from Bank of Japan Governor Kazuo Ueda, who signaled that a rate hike could be considered later this month.
“Trade tensions, doubts about Federal Reserve independence, and the U.S. government shutdown are all weighing heavily on the dollar,” said Pepperstone research strategist Dilin Wu. “Investors are turning to assets that can’t easily be devalued — gold, cryptocurrencies, and the Swiss franc — as a hedge against risk.”
The dollar index, which measures the greenback against six major currencies, was down 0.7% for the week, marking its largest decline since late July. The dollar fell 0.4% against the franc to 0.7898 and dropped 0.39% versus the yen to 149.825, slipping below the 150 threshold for the first time since early October.
Meanwhile, the yen’s rebound comes amid political uncertainty in Japan, where parliament is set to vote on October 21 to appoint a new prime minister following internal divisions within the ruling coalition.
City Index strategist Fiona Cincotta noted that market sentiment had turned sharply risk-averse. “Rising U.S.-China trade-war worries and concerns over regional banks are reminders that the economic outlook isn’t as bright as investors hoped,” she said. “The move into safe-haven assets — from gold to the Swiss franc — shows a clear ‘risk-off’ shift across global markets.”
Source:Africa Publicity
