By Joseph Adinolfi, MarketWatch , Kosaku Narioka
British pound firms; on track for best weekly performance among G-10 currencies
The dollar weakened Friday against most of its G-10 rivals, but remains on track for its strongest weekly rise since February.
The greenback has rallied sharply on the expectation that Trump's plans for increasing fiscal stimulus would embolden the Federal Reserve to raise interest rates more quickly. Despite reversing some of those gains on Friday, the greenback remained on track for its strongest weekly performance against the euro since February.
Read:Trump stock-market rally reflects expectations for new era of fiscal stimulus (http://www.marketwatch.com/story/trump-stock-market-rally-signals-new-era-of-huge-government-spending-2016-11-10)
The ICE U.S. Dollar index , a measure of the buck's strength against six of its biggest G-10 rivals, was flat at 98.777, as the euro edged. The euro strengthened 0.2% to $1.0907, from $1.0885.
"We've had such a huge surge this week, [the dollar] is probably running out of gas," said Colin Cieszynski, chief markets strategist at CMC Markets.
Fed Vice Chairman Stanley Fischer took some air out of the greenback on Friday when he reiterated that interest-rates would rise at a gradual pace (http://www.marketwatch.com/story/fischer-case-for-fed-interest-rate-hikes-quite-strong-2016-11-11). In theory, higher interest rates would support the buck by increasing the return on dollar-denominated investments.
In a reversal of fortune, the British pound strengthened 0.9% to $1.2655, on track for the strongest weekly performance of any G-10 currency, as expectations for a "soft" Brexit increased.
The euro weakened 0.5% to 86.29 pence, compared with 86.78 pence late Thursday in New York. Sterling is up sharply against the euro so far this week as investors worry that the populist movement that inspired Brexit and catapulted Trump to the presidency will soon spread to the Continent.
"More populist movements are taking hold in Europe as well, which increases the potential for more political turmoil," Cieszynski said.
EM selloff continues
Emerging-market currencies--most notably the Brazilian real and Mexican peso--have slumped against the dollar. a result of an expected shift toward protectionism in the U.S.
"Trump's victory wreaks havoc on EM assets, and MXN [the Mexican peso] has been leading the frenzied selloff across EM currencies," said Kit Juckes, chief currency strategist at Société Générale.
The dollar was up 1.7% at 20.8779 pesos, pushing the Mexican currency to a fresh all-time low. It traded at 20.52 pesos late Thursday. The Brazilian real gained 0.7% to 3.42 Brazilian real, compared with 3.40 real on Thursday.
(END) Dow Jones Newswires
November 11, 2016 09:11 ET (14:11 GMT)
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