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Dollar has 8th straight week of gains; U.S. stocks edge up

Published 08/09/2023, 12:16 pm
Updated 09/09/2023, 06:50 am
© Reuters. FILE PHOTO: Passersby are reflected on an electric stock quotation board outside a brokerage in Tokyo, Japan April 18, 2023. REUTERS/Issei Kato/File Photo
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By Caroline Valetkevitch

NEW YORK (Reuters) - The U.S. dollar index registered an eighth straight week of gains on Friday while global stock indexes ended slightly higher on the day ahead of key U.S. inflation data next week.

The dollar index's weekly winning streak was its longest since 2014, bolstered by recent data suggesting the U.S. economy is still resilient. For the day, the index was nearly flat at 105.08.

In contrast, China's onshore yuan ended its domestic session at its weakest since 2007 amid concern about China's slowing economy.

Strong U.S. economic data this week have left some investors worried that even if the Federal Reserve leaves rates unchanged this month, they could remain high for longer than anticipated.

Investors are waiting for the U.S. Consumer Price Index reading for August, due Wednesday, especially with oil prices rising.

"The dollar has been higher on the back of obviously stronger U.S. data ..., suggesting that the Fed perhaps has another rate hike before the end of the year," said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

Wall Street's three major stock indexes ended barely higher, with shares of Apple (NASDAQ:AAPL) up just 0.3%. Apple had fallen in the last two sessions on news reports of China curbing iPhone use by state employees.

The Dow Jones Industrial Average rose 75.86 points, or 0.22%, to 34,576.59, the S&P 500 gained 6.35 points, or 0.14%, at 4,457.49 and the Nasdaq Composite added 12.69 points, or 0.09%, at 13,761.53.

All three major U.S. stock indexes were lower for the week.

The pan-European STOXX 600 index was up 0.2%, breaking a seven-day string of losses, while MSCI's gauge of stocks across the globe gained 0.01%.

Dollar gains have also prompted a step up in rhetoric from Japanese policymakers growing uncomfortable with the yen's slide.

Japan's top currency diplomat Masato Kanda said this week authorities will not rule out any option to clamp down on "speculative" moves, while chief cabinet secretary Hirokazu Matsuno said the government was watching with "urgency."

The Japanese yen was last at about 147.82 per dollar and on the weaker side of the key 145-level that prompted Japan intervention last year.

Longer-dated U.S. Treasury yields slipped as investors digested recent comments from several Fed officials, including some comments that underpinned the view the U.S. central bank may be able to pause in its rate hike cycle.

The yield on the benchmark U.S. 10-year Treasury note shed 1 basis point to 4.256%. The 10-year yield is up about 9 basis points for the week.

© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 24, 2023.  REUTERS/Brendan McDermid

In energy, oil prices rose to a nine-month high as U.S. diesel futures rose and as investors worried about tight oil supplies.

Brent futures rose 73 cents, or 0.8%, to settle at $90.65 a barrel, while U.S. crude

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