Dollar rally slows ahead of weekend

The U.S. dollar was mostly steady after a burst of strength overnight propelled it to fresh 13-year peaks on a trade-weighted basis. The dollar has been the only game in town since the election whose aftermath actually saw expectations of a U.S. interest rate hike this year become a near certainty. Meanwhile, although it’s early and America doesn’t change presidents for another two months, optimism is on the rise that the next administration, under a unified government in Washington, might institute policies that boost growth and inflation. Should the U.S. economy receive a meaningful tailwind from Washington, the Federal Reserve might have to raise borrowing rates more frequently which would make the dollar a more attractive bet. The dollar was steady to mixed Friday, near fresh five- and 11-month peaks against the yen and euro, though a tad softer against the loonie ahead of key Canadian inflation data this morning.

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