Dollar bounces but down for third straight week
By Dion Rabouin
NEW YORK (Reuters) - The dollar rose against most major currencies on Friday, recovering from a five-month low, as traders exited short positions after two straight days of selling in the wake of the Federal Reserve's cautious view on global market developments.
The dollar index .DXY, which measures the greenback against six major currencies, was up 0.4 percent but analysts said doubt remained that the U.S. currency would regain its footing in the near term.
It was down by just over 1 percent for the week, marking the third straight week of losses for the index.
The dollar rose 0.3 percent to 111.75 yen JPY= on Friday, moving further from a 17-month low on Thursday of 110.65. For the week, the dollar shed nearly 2 percent against the yen, its steepest fall against the Japanese currency in five weeks.
UBS lowered its short-term forecasts for dollar-yen, moving its three- and six-month targets lower.
"With the Fed reaffirming its caution in hiking rates, we expect a more gradual recovery of the USDJPY pair," the UBS analysts said in the note.
The euro retreated from a five-week high of $1.1342 EUR=, falling 0.45 percent against the dollar to $1.1265. It was up just over 1 percent for the week.
"We obviously had this very, very strong reaction after the Fed," said Axel Merk, president and portfolio manager at Merk Hard Currency Fund in Palo Alto, California. Continued...