Dollar Gains Against Riskier Currencies
The U.S. dollar recovered after an early weak spell on Friday and stayed firm right through thereafter on safe-haven demand amid reports showing marked spikes in coronavirus cases in several states in America and in Beijing.
Although reports suggested the virus infection in China is under control, the World Health Organization’s warning that the pandemic is “accelerating and the world is in a new and dangerous phase” unsettled the U.S. market post noon on Friday.
Displaying strength during most part of the week, the greenback notched up its best weekly returns in about a month.
The dollar index, down at 97.16 at one stage Friday morning, rallied to 97.72 later on, gaining about 0.3% from previous close.
Against the Euro, the dollar firmed up to $1.1177 from overnight $1.1204. Data from the European Central Bank showed the euro area current account surplus fell to EUR 14.4 billion in April from EUR 27.4 billion in March. This was the lowest since April 2017, when the surplus was EUR 11.7 billion.
The surplus on trade in goods narrowed to EUR 13 billion from EUR 32 billion a month ago, while the surplus on services doubled to EUR 4 billion from EUR 2 billion.
The Pound Sterling was weaker by nearly 0.6% with a unit fetching $1.2351 compared to $1.2421 Thursday evening. Retail sales volume in U.K. increased at a pace of 12% on month, in contrast to an 18% decrease in April, the data showed. Sales were forecast to climb 5.7%.
Against the Yen, the dollar was down marginally at 106.85 yen a dollar, with the yen’s safe haven appeal supporting it.
Against the Aussie, the dollar was stronger at 0.6835, while against the Loonie, it was up marginally at C$1.3609. Data showing a sharp plunge in Canadian retail sales in the month of April weakened the Canadian currency. However, rising crude oil prices limited its weakness.
Against Swiss franc, the dollar fetched CHF0.9523, compared to CHF0.9514 on Thursday.