The dollar falls and records the first weekly decline in June

An important factor this week was the drop in oil and commodity prices, which eased inflation concerns and allowed stock markets to rebound. This led to the erosion of the safe haven status that had been supporting the dollar against the other major currencies.

The dollar index, which measures the performance of the US currency against a basket of six major currencies, fell about 0.2 percent to 104.15.

The dollar, considered a safe haven, fell further after data showed that new home sales jumped 10.7 percent to a seasonally adjusted annual rate of 696,000 units last month.

The dollar, which has risen about 9 percent this year, lost some of its luster after investors began betting that the Federal Reserve could slow the pace of interest rate tightening after another 75 basis point increase in July. They now see rates peaking in March at around 3.5 percent and dropping by about 20 basis points by July 2023.

The interest rate hike brought 10-year Treasury yields to their lowest in two weeks, while the dollar index fell 0.5 percent this week.

The Japanese yen, particularly sensitive to changes in US Treasury yields, fell 0.2 percent to 135.20 per dollar.

The euro rose 0.2 percent to $1.0574.

The US dollar’s decline boosted even commodity-linked currencies such as the Australian dollar and the Norwegian krone. The Australian dollar rose 0.7 percent to $0.6944, although it is still on track for a third consecutive week of decline.

The Norwegian krone was up 1 percent at 9.871 per dollar. The Swiss franc touched its highest level since early March against the euro at 1.0055, up 0.5% on the day.

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