US Treasury yields and crude oil declines weighed on the greenback, but cautious investor sentiment supported weekly gains.
The US dollar finished the week higher despite mixed performance on Friday, as investors adopted a more cautious stance toward risk assets. Falling US Treasury yields, particularly at shorter maturities, and a sharp drop in crude oil prices to $69.23 pressured the greenback late in the session. Markets grew more confident that Middle East tensions would not disrupt energy flows through the Strait of Hormuz, easing supply concerns.
Earlier in the week, the dollar benefited from hawkish Fed commentary, including remarks from Minneapolis Fed President Neel Kashkari suggesting further rate hikes may be needed to combat persistent inflation. US consumer sentiment also missed expectations, with the University of Michigan’s final June reading at 49.5 versus a forecast of 50.0. The Nasdaq led modest declines in major stock indices, reflecting broader risk aversion.
The US trade deficit widened more than expected in May, with the advance goods trade balance at -$105.8 billion against a consensus of -$85.0 billion. Wholesale inventories rose 0.3%, matching expectations but offering little support to growth concerns.