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flurry of positive vaccine news has helped drive a rally in
riskier currencies, while actions taken by the Federal Reserve
have weakened the dollar.
The dollar index dropped to a two-and-a-half-year low of 90.504
on Thursday and is on track for a more than 1% fall over the
week. It edged down 0.1% on the day at 90.578.
"It has been another bad week for the US dollar," analysts at
MUFG said in a note. "It will encourage speculators to rebuild
short US dollar positions which have been pared in recent
months."
Investors have turned short dollars, figuring rates will stay
low for a long time in the United States, forcing yield-seekers
to head elsewhere for better returns.
Investors will get a further indication of how the U.S. economy
is holding up at 1330 GMT, with monthly payrolls data expected
to show employment growth, but at a slower pace.
The euro has been one of the biggest winners from recent dollar
weakness, breaking decisively above $1.20 this week and is on
track for a more than 2% weekly gain.
The single currency hit a two-and-a-half-year high of $1.21770,
just above the previous day's benchmark. It was last up 0.2%.
"The euro is holding above the $1.21 level for the first time
since spring 2018, despite the fact that there is only a week to
go before the European Central Bank is expected to add more
policy stimulus," said Rabobank strategist Jane Foley.
The yen was broadly steady against the dollar on Friday, while
sterling jittered against the dollar and euro with Brexit trade
talks between the UK and European Union at a critical stage.
(Reporting by Iain Withers, Additional reporting by Tom
Westbrook in Sydney; editing by Kim Coghill, Larry King)
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