By Anora Mahmudova, MarketWatch
British pound extends slide below $1.23
The U.S. dollar was little-changed against major rivals on Friday, with most investors avoiding big bets ahead of the December holiday weekend.
The U.S. Dollar Index , which measures the buck against a half-dozen rivals, was unchanged at 103.03, hovering near its 14-year highs. For the week, the index rose 0.1%. The greenback has gained 5.2% since November's presidential election.
Investors expect President-elect Donald Trump to advocate for policies that will both accelerate economic growth and boost inflation.
"The dollar strength will continue into the next year, but after the inauguration we will find out if the new administration is willing to tolerate the strong currency," said Simon Derrick, currency strategist at BNY Mellon.
"In order to make manufacturing in the U.S. competitive, something President-elect Trump advocated during the campaign, the dollar cannot continue to strengthen. We should watch what the new administration says after the inauguration," Derrick said. A stronger dollar has often been cited as a headwind to companies who sell products abroad.
Derrick also said geopolitical unrest could be influential to currencies, including the buck.
"If the past several years were dominated by monetary policy, that has changed this year, with foreign exchange markets now moving on politics, with Brexit and Italian referendum being clear examples," said Derrick.
The British pound recovered some ground, after falling in early trade. The stirling bought $1.2273 late Friday in New York, only fractionally lower than $1.2281 it bought late Thursday in New York. The British currency has mostly been in the downdraft against other major currencies since the U.K. voted to abandon its membership of the Europe's trade bloc, or Brexit, in June.
But the region's economy has performed relatively well. The final official reading on the economy showed the U.K. economy grew slightly faster than first forecast in the third quarter after the Brexit vote, expanding at a 0.6% rate.
In other currency pairs. the euro was changing hands at $1.0450 late Friday in New York, 0.1% higher than 1.0439. The currency was flat over the week. The euro is trading near the lowest levels in 14 years, amid worries over Italy's banking system. The Italian government reportedly is preparing (https://www.bloomberg.com/news/articles/2016-12-23/monte-paschi-s-544-year-journey-from-the-renaissance-to-rescue)a bailout of struggling BancaMonte dei Paschi di Siena (BMPS.MI).
The Japanese yen also recovered some ground, with the dollar buying Yen117.23 compared with Yen117.45, a change of 0.2%. Over the week, the yen was 0.6% firmer. Still, the yen is trading near its weakest level since February.
The greenback also strengthened against the Canadian dollar , after the data showed the Canadian economy shrank for the first time in five months in October. The dollar was trading at C$1.3540 late Friday in New York compared with C$1.3485 late Thursday in New York. Over the week, the dollar strengthened 1.5%.
(END) Dow Jones Newswires
December 23, 2016 13:57 ET (18:57 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.