the dollar fell broadly friday as investors took profits on a powerful rally that has driven the u.s. currency to 14-year-highs this week. the wsj dollar index, which measures the u.s. currency against 16 others, fell 0.2% to 91.80. analysts noted trading was quiet due to the thanksgiving holiday thursday and shortened trading sessions friday for the u.s. government bond and stock markets. analysts at brown brothers harriman expect the dollar<u+2019>s declines to be short-lived. <u+201c>the dollar<u+2019>s losses are minor, and the forces that drove it higher remain intact,<u+201d> wrote bbh analysts in a research note. the dollar soared to its highest level since 2002 this week as investors grow more confident about u.s. economic growth and the prospect for higher interest rates. president-elect donald trump <u+2019>s proposals to boost fiscal stimulus are expected to support the u.s. economy and inflation outlook, while the federal reserve has indicated that u.s. interest rates could rise as soon as next month. fed-funds futures, a popular tool for traders to bet on u.s. interest-rate policy, show a 94% probability that the fed lifts rates next month, according to data from cme group . higher rates typically support the dollar by making the currency more attractive to yield-seeking investors. data expected next week on u.s. gross domestic product growth, hiring and manufacturing could confirm a december rate increase, analysts said. emerging-market currencies, which have been under pressure since the nov. 8 election, reclaimed some ground against the dollar friday. the dollar fell 0.3% against the mexican peso, 0.4% against the indian rupee and 0.5% against the south korean won. higher u.s. rates tend to hurt developing nations by making their assets less attractive to investors and making their dollar-denominated debt more expensive to pay back. write to chelsey dulaney at chelsey.dulaney@wsj.com
dollar falls in quiet trading - wsj
chelsey dulaney