U.S. Dollar Climbs Amid Risk Aversion
The U.S. dollar spiked up against its most major rivals in the European session on Friday, as rising virus cases, U.S. stimulus deadlock and Brexit uncertainty raised the appeal of the safe-haven assets.
Talks on U.S. stimulus failed to make progress, with Democrat House Speaker Nancy Pelosi indicating that negotiations could stretch beyond Christmas if necessary.
Coronavirus cases surpassed 70 million globally with 1,588,437 deaths as U.S. authorities approved emergency use of Pfizer’s vaccine.
On the Brexit front, Prime minister Boris Johnson said that there was “a strong possibility” for failure to strike a post-Brexit trade deal.
His comments intensified concerns over a no-deal Brexit by the end of the year.
Traders await U.S. economic reports on producer price inflation and consumer sentiment index due later in the day.
The greenback reversed from an early 4-day low of 1.2163 against the euro, rising to 1.2112. If the greenback continues its uptrend, 1.20 is possibly seen as its next resistance level.
Final data from Destatis showed that German consumer prices declined for the third straight month in November.
Consumer prices fell 0.3 percent year-on-year in November, following declines of 0.2 percent each in both September and October. The rate came in line with the estimate published on November 30.
The greenback jumped to more than a 3-week high of 1.3178 against the pound, after falling to 1.3324 at 10:00 pm ET. The greenback is seen finding resistance near the 1.28 level.
The greenback edged higher to 0.8893 against the franc and 1.2720 versus the loonie, off its early lows of 0.8851 and 1.2777, respectively. The greenback is poised to target resistance around 90.00 against the franc and 1.26 versus the loonie.
Reversing from its early 2-1/2-year lows of 0.7113 against the kiwi and 0.7572 against the aussie, the greenback moved up to 0.7074 and 0.7520, respectively. The next possible resistance for the dollar is seen around 0.68 against the kiwi and 0.71 against the aussie.
In contrast, the greenback declined to a 4-day low of 103.93 against the yen during the Asian session and wavered in subsequent deals. The pair had ended Thursday’s trading session at 104.22.
The U.S. producer price index for November and University of Michigan’s preliminary consumer sentiment index for December are set for release in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com