The US dollar emerged stronger against the European currency as it ended higher for a ninth consecutive week on Friday, while hitting six-year highs against the yen.
As the greenback performed better, the speculations grew that the Federal Reserve may adopt a more hawkish tone when it meets next week.
Meanwhile, the upward trend in the US economic data has raised expectations of interest rate hike soon by the Fed. The investors are expecting any such raise in interest rates by next year.
The American consumer sentiments also hit a 14-month high, while the retail sales data showed spending increased broadly in August.
Scott Brown, chief economist at Raymond James in St. Petersburg, Florida, said, “The general message on the economy is that it’s improving, but we still have a lot of slack to take up.”
On Friday, the US Treasury debt yields also surged with benchmark yields posting their highest weekly rise in over a year. This made the US dollar emerge stronger in the global market, while attracting more investments.
Bruce Zaro, chief technical strategist, Delta Global Asset Management in Boston, said, “What’s been creeping into investors’ minds is the inevitability of the Fed raising rates and whether they’re going to do it sooner rather than later.”
The benchmark 10-year US Treasury note fell 20/32, the yield at 2.605 percent.
On the stock side, the US stocks declined as energy shares extended their recent drop and the increasing bond yields encouraged slide in high-dividend-paying shares. The major American indexes finished lower after posting gains for five consecutive weeks.