US dollar faces biggest weekly loss in a year amid Trump policy speculation

The US dollar is on track for its largest weekly loss in a year, retreating from the sharp rally driven by expectations that Donald Trump’s policies would push the currency higher.

The dollar slipped 0.4% Friday, extending the week’s decline to 1.3%, News.Az reports, citing foreign media.

The yen was the biggest beneficiary, advancing 3.5% against the greenback this week, as bets grow on the Bank of Japan raising interest-rates next month.

Some of the pullback for the dollar came after Trump announced the nomination of hedge-fund veteran Scott Bessent as Treasury Secretary, a choice that was seen as promising a more traditional approach toward economic policy. Much of the dollar’s jump has reflected expectations that Trump would upend the Federal Reserve’s rate-cutting path by enacting steep tariffs that would reignite inflation.

The euro rose 1.6% this week, bouncing back after hitting the lowest in two years last Friday.

The yen gained as much as 1.4% Friday to 149.47 per US dollar after Bank of Japan Governor Kazuo Ueda said rate hikes are “nearing” in a Nikkei interview published Saturday in Tokyo.

The yen got an earlier boost from Tokyo inflation accelerating more than expected in November, increasing speculation over a possible December rate hike.

Month-end flows are also weighing on the dollar as well as traders cutting their bets on the greenback further advances, according to Helen Given, a foreign-exchange trader at Monex.

Speculative traders boosted their bets on dollar gains in the week ending Nov. 19 to the most bullish level since late June, Commodity Futures Trading Commission data show. They switched to long dollar bets mid-October. The CFTC will report new data Monday.

News.Az