Dollars up however no mates en path to worst week in a month
From Gina Lee
Investing.com – The dollar rose in Asia on Friday morning but slipped through key support levels and headed towards its worst week in a month.
The greenback versus a basket of other currencies rose 0.15% to hit 89.817 by 9:24 p.m. (02:24 a.m. GMT).
The dollar fell 1.2% this week, dropping 12.7% from a three-year high in March to 89.862, just above the two-and-a-half year low set Thursday at the start of the session. As investors turned to risky assets throughout the week, the dollar made multi-year lows against the euro, pound, AUD, NZD and the Canadian dollar.
News of the launch of vaccines, as well as progress in both Brexit trade talks and recent U.S. stimulus measures last week, only lifted bearish sentiment after shorting the dollar the previous week to just below the nine-year high had risen.
Some investors remained pessimistic about the dollar's outlook.
"It's a perfect combination that is currently besieging the dollar," Rodrigo Catril, senior currency strategist at National Australia Bank (OTC :), told Reuters.
"Currently, the portrayal of global growth and the expansion of the recovery favor risk-sensitive currencies such as the AUD and NZD, and more of that is expected in 2021," he said.
The pair was up 0.18% to 103.29. The Bank of Japan will make its policy decision later in the day, widely expected to keep rates stable but heralds an expansion of a package of moves aimed at alleviating corporate funding problems.
The pair was down 0.12% to 0.7611.
The pair fell 0.06% to 0.7144. The NZD rose to a two-and-a-half year high of $ 0.7170 on Thursday after New Zealand released better-than-expected national growth data. The country grew 14% quarter over quarter in the third quarter, beating Investing.com's forecast growth of 13.5% and the 11% decline reported for the second quarter.
Some investors remained bullish as the NZD posted an eighth straight week of growth, its longest weekly rate in three years.
"If we sign a US fiscal deal and a Brexit deal before Christmas, nothing will stop the NZD," ANZ analysts said in a note.
The pair was up 0.12% to 6.5397.
The pair fell 0.24% to 1.3550. The pound was down slightly from its 31-month high overnight as both the UK and the European Union expressed doubts that an agreement could be reached on their post-Brexit trade deal. However, some investors have bet that the warnings on the way to a deal are nothing but brinkmanship.
The euro moved towards a high of $ 1.2556, not seen since 2018, and traded at $ 1.2254 on Friday after minor profit taking. The common currency is up nearly 3% in the three weeks following strong resistance at USD 1.2000.
In other European countries, the Norwegian krone rose 1.4% on Thursday. Norges Bank left rates unchanged in its policy decision made on the same day, but said an economic recovery fueled by COVID-19 vaccines could lead to rate hikes in early 2022 or even earlier.
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