|
The
dollar index's rebound from three-year lows began last week. It
picked up as European markets opened on Friday, having slowed
overnight after U.S. Federal Reserve Chair Jerome Powell said
"now is not the time" to be talking about changing the Fed's
asset purchases.
President-elect Biden laid out his $1.9 trillion stimulus
package proposal on Thursday, but analysts said that the market
impact was limited by uncertainty over how easily Democrats will
be able to get their proposals through the Senate.
"The reality is that while the Democrats now have increased
power having won the run-off elections in Georgia last week,
that power still has its limits," MUFG currency strategist Derek
Halpenny wrote in a note to clients.
"While short-term, the U.S. dollar could extend further, the
big-picture backdrop for the dollar remains negative," he added.
At 1141 GMT, the dollar index was at 90.407 versus a basket of
currencies, up 0.2% on the day. It was set for a weekly gain of
around 0.4%, making this its strongest week since November.
Against a stronger dollar, the euro was down 0.2% at $1.21325.
Rising coronavirus infections also curbed risk appetite, as
daily cases in China hit their highest in more than 10 months.
France will tighten its COVID-19 border controls and bring its
curfew forward by two hours, while German Chancellor Angela
Merkel said she wanted "very fast action" to counter the spread
of virus variants after Germany had a record number of deaths.
"Rising new cases globally have induced headwinds to the
short-term economic recovery," said Simon Harvey, senior FX
analyst at Monex Europe.
"It’s a bit more favourable at the moment in the U.S.. There’s
rising case counts, but not necessarily nationwide restrictions
being rolled out," he said, adding he expected the dollar to be
supported while other major economies are subject to tighter
lockdown measures.
For a graphic on dollar:
https://fingfx.thomsonreuters.com/
gfx/mkt/xlbpgygwqpq/dollar%20weekly%20change.png
The outgoing Trump administration ramped up tensions with China,
imposing sanctions on Chinese officials and companies, including
an investment ban on nine additional companies - moves China
said it opposes.
The Australian dollar - seen as a liquid proxy for risk - was
down around 0.6% at 0.7736 versus the U.S. dollar at 1147 GMT.
The New Zealand dollar was also down around 0.6% on the day.
The dollar rose around 0.2% against China's offshore yuan, with
the pair changing hands at 6.476 at 1148 GMT.
(Reporting by Elizabeth Howcroft, editing by Larry King and
Barbara Lewis)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
