Peter Nurse

Investing.com: The U.S. Dollar edged up in European early trade on Friday but still faces its worst week since February, as traders react to the lower yields from U.S. Treasury securities.

The, which measures the greenback’s performance against six currencies in a basket, was 0.1% lower at 102.888 ET (755 GMT) but it fell 1.6% during the week. This is despite a winning streak of six weeks.

Before this week’s rally, the dollar was strong in demand. Last Friday’s rise to $1.03 per USD, its highest point since January 2003, is due to its popularity as a safe-haven from the growing risks from aggressive monetary tightening.

However, a decline in U.S. yields has tarnished that appeal, with the benchmark falling to a three-week low of 2.772% on Thursday before recovering to 2.859% early Friday, still some way off the 3½-year high of over 3.2% earlier this month.

“In a wider picture, the ongoing retreat in the buck looks like a bearish correction from multi-year highs at this stage,” said Kevin Beckman, an independent financial analyst. “The overall uptrend remains intact, especially as the Fed continues to outperform other central banks in tightening while the USD’s safe-haven status keeps it afloat in turbulent times that will persist in the longer term as well.”

Although the weekly gain was still over 1.6%, the index edged down to 1.0581. The index gained 0.1% to 1.2476 and climbed 1.8% this week. Better than expected April data helped to boost its performance of 1.4% month-on month, after a 1.2% decrease in March.

Following gains of 1.3%, the dollar rose to 0.7053. However, it fell to 127.75.

Other markets fell 0.4% at 6.6872, after a surprisingly large margin on Friday as Beijing battles slowdowns in its second-largest economy.

China lowered the five-year loan prime rate, a benchmark reference rate for mortgages, by 15 basis points to 4.45%, the largest cut on record, in an attempt to boost the country’s housing market which has been hurt by the COVID-19 related mobility restrictions.

China’s lockdowns to combat the outbreaks of COVID-19 could mean its economic growth may undershoot the U.S. for the first time since 1976.