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    Dollar ended the week higher against its counterparts

    The U.S. dollar finished the week strongly higher against its other major counterparts on Friday, regardless of lower expectations of a near-term interest rate hike by the U.S. central bank.
     
    The U.S. dollar index, which tracks the greenback’s performance against a group of six other currencies, rose 0.65% on Friday, with the index ending the week gaining 0.56%.
     
    Investors have lowered the expectations on the timing of the next interest rate hike by the Federal Reserve, after the disappointing May report, which indicated that the economy added only 38,000 jobs last month, marking the smallest rise since September 2010.

    The CME Group indicated on Friday that there is a 1.9% probability that the FOMC will hike rates in June. The chance of at least one rate hike in 2016 is at 58.8%.

    Janet Yellen said at a speech on Monday that interest rates won’t rise until uncertainty over the economic growth is settled. The Fed Chair argued that she expects the economic recovery to gain traction, but gave no clues on the timing of the next rate hike.
     
    The euro ended the day losing 0.57% at 1.1250 against the dollar, bringing the week’s losses to 1.02%.  
     
    The yen fell 0.10% at 106.98 against the greenback on Friday. The pair finished the week with 0.42% gains.
     
    The British pound was sharply lower, with GBP/USD plunging 1.39% on Friday at 1.4258. The major ended the week losing 1.8% amid persistent uncertainty over whether the Brits will remain in the E.U. or not at the referendum scheduled for the 23rd of June.
     
    Elsewhere, the commodity currencies were broadly lower, with AUD/USD losing 0.79% at 0.7327, the NZD/USD falling 0.65% to 0.7059 and the USD/CAD rising 0.50% to trade at 1.2785.

    In the week ahead, market participants will be closely monitoring Wednesday’s monetary policy announcement by the Federal Reserve for new signs on the future direction of rate hikes, we well as monetary policy meeting in Japan, Switzerland, and the U.K.
     

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