October 16, 2020 at 08:31AM
The yen rose and the dollar was headed for its best week of the month on Friday, as surging coronavirus cases and stalled progress toward U.S. stimulus had investors seeking safe assets. As fresh curbs to combat COVID-19 were introduced in Europe and Britain, the world’s reserve currency surged to a two-week high of 93.910 against a basket of currencies. It held just below that peak in the Asia session.
The safe-haven yen crept back toward a two-week high it hit on Wednesday and last traded at 105.24 per dollar. The Australian dollar slipped 0.3% and other majors nursed losses.
London enters a tighter COVID-19 lockdown from midnight, which with a curfew in Paris leaves two of Europe’s largest cities living under state-imposed restrictions. The U.S. Midwest is also battling record surges in new cases just as data shows the U.S. recovery losing steam and as stimulus plans bog down in a three-way negotiation between the White House, Senate Republicans and House Democrats.
Risk sensitive currencies have been hit hardest, with the Australian dollar, the kiwi and Norwegian krone leading weekly falls. The Norwegian krone is nursing a 2.5% loss this week, while the Aussie is down 2.3%. Sterling was also heavily sold on Thursday on concerns about the obstacles keeping the European Union and Britain from reaching a Brexit trade deal. It has lost 1.1% this week and held at $1.2893 on Friday. The euro was flat in Asia on Friday but has lost about 1% for the week. The U.S. dollar was likewise steady and has gained 0.8% against a basket of currencies this week, its largest weekly rise since late September.
The yuan, meanwhile, has been resilient in the wake of a nudge lower from the People’s Bank of China. Last weekend the PBOC cut the cost of shorting the currency and has been gently edging the onshore trading band a bit weaker.
Dollar heads for weekly gain as pandemic recovery stalls, Reuters, Oct 16
From: The FxPro News Team https://fxpro.news/daily-forex-outlook/dollar-heads-for-weekly-gain-as-pandemic-recovery-stalls-20201016/
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