The dollar index, which measures the value of the US currency against six major world currencies, fell 0.3 percent last week to 98.21 points.
The dollar exchange rate against the euro remained almost unchanged, with the euro ending the week at USD 1.1720. The dollar, however, fell 1.5 percent against the yen, closing at 157.03 yen (JPY) on Friday, Hrportfolio reports.
The US dollar weakened against the yen after Japanese authorities intervened on Thursday to support its currency, sending the yen to 160 JPY per dollar – its weakest level since July 2024.
On Thursday alone, due to the purchase of yen by Japanese financial authorities, the dollar fell as much as three percent against the Japanese currency, to 155.5 JPY, its biggest one-day drop since late December 2024.
Japanese authorities are unhappy with the weakness of the yen, which could worsen inflation in Japan. Data from the Bank of Japan released on Friday showed that Japan spent as much as 5.48 trillion JPY, or 35 billion USD, in an intervention that strengthened the yen against the dollar.
Movements in foreign exchange markets were also influenced this week by the meetings of the world's largest central banks.
The US Federal Reserve left interest rates unchanged on Wednesday, as expected, but four of the central bank's 12 policymakers voted against sending a message of further easing, the biggest split on monetary policy since 1992.
The market then estimates that there will be no reduction in Fed interest rates this year, and that they may even increase by next spring. By raising interest rates, central banks are trying to curb inflation, but they are also slowing down economic growth.
Neither the Bank of England nor the European Central Bank (ECB) left interest rates unchanged last week, but European monetary authorities discussed raising them to curb inflation, which reached 3 percent in April, well above the ECB's 2 percent target.
