U.S. dollar posts 2016 gain on Trump victory, Fed forecasts
By Sam Forgione
NEW YORK (Reuters) - The U.S. dollar slipped on Friday but notched its fourth straight year of gains against a basket of major currencies.
The dollar index .DXY, which measures the greenback against a basket of six major rivals, gained about 3.7 percent for the year.
The index rose about 7.1 percent during the fourth quarter, more than half that gain coming since the Nov. 8 U.S. presidential election on expectations that U.S. President-elect Donald Trump's plan to boost fiscal stimulus would benefit the currency. A faster projected pace of rate hikes from the Federal Reserve next year also contributed.
Several analysts have said the dollar's uptrend remains intact next year, but noted the risk of dollar weakness given doubts surrounding how much dollar appreciation a Trump White House will tolerate.
"Much depends on how the Trump presidency and the Chinese economy work out," said Marshall Gittler, chief market analyst for retail broker FX Primus.
For the day, the dollar index was last off 0.38 percent at 102.290, down from a 14-year high of 103.65 hit on Dec. 20, and was up 0.18 percent against the yen at 116.74 yen JPY=. The greenback was still set to post its first yearly loss in five against the Japanese currency, of about 2.9 percent.
Sterling, which fell roughly 16.2 percent against the dollar to mark its worst year since 2008 on worries over Britain's June 24 "Brexit" vote to leave the European Union, was last up 0.62 percent GBP=D4 at $1.2340.
Sterling bore the brunt of concerns this year over Britain's trade policy with Europe which flared up following the Brexit vote, said Jason Leinwand, founder and chief executive of FirstLine FX in Randolph, New Jersey. Continued...