The dollar was on the brink of losing a week on Friday as the massive new Federal Reserve lending program for small businesses and signs of a slowdown in coronavirus infections reduced demand for refuge.
The pound advanced against the dollar and the euro as markets breathed a sigh of relief after British Prime Minister Boris Johnson left intensive care after being hospitalized for COVID-19 symptoms.
Oil-producing countries’ currencies also held gains against the U.S. currency, but prospects remain uncertain due to doubts that an agreement between OPEC and its allies for a record reduction in oil supply would suffice to offset the collapse in global fuel demand.
Risk sentiment has steadily improved this week on temporary signs of a slowing pandemic in US and European hotspots, but some analysts remain cautious given that little is known about the virus and that many countries continue to face the massive economic damage caused by the epidemic. .
“The Fed has taken many different measures, but the end result is a large increase in the supply of dollars,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.
“The positive news about the virus is reducing the type of panicky dollar repatriation we saw earlier this year. The end result is a gradual weakness in the dollar.”
Against the euro, the dollar last stood at $ 1.0926, on its way to a weekly decline of 1.2%.
The dollar traded at 0.9660 Swiss francs, down 1% for the week.
Trade is expected to be moderate on this day, as the financial markets of Australia, Hong Kong, Singapore, Britain and the United States are closed for the Good Friday holidays.
The Fed announced on Thursday a $ 2.3 trillion program to provide loans to local governments and small and medium-sized businesses, the latest step to support the US economy as the country battles the coronavirus crisis.
The Fed also lowered interest rates to zero, restated quantitative easing and increased dollar liquidity to address a shortage in the money markets, leaving the dollar in the grip of the bears in the spot market.
New York, the United States most affected by coronavirus, has provided new evidence that the arc of disease caused by the virus is flattening.
The greenback was last traded at 108.49 yen, unchanged for the week, as concerns over an increase in coronavirus infections and the declaration of a state of emergency in Japan offset sales in dollars.
The coronavirus first appeared in China at the end of last year and has since spread worldwide, infecting more than 1.5 million people and killing more than 90,000 people.
On the Chinese mainland, the yuan headed for a weekly gain of 0.9% against the dollar, its highest level since February 2019 while China continues to report a decline in new cases of coronavirus.
The Australian dollar, which is very sensitive to the feeling of risk due to Australia’s dependence on China and world trade in raw materials, jumped 5.6% against the greenback this week , which highlights the alleviation of stress in world markets.
The pound held steady at $ 1.2459 on Friday and headed for a gain of 1.6% this week. Against the euro, the pound was on track for its third consecutive weekly gain.
On Sunday, the British Prime Minister became the first world leader to be admitted to hospital for persistent symptoms of COVID-19, the disease caused by the new coronavirus.
This initially raised concerns about a leadership vacuum, but Johnson’s condition gradually improved.
The Canadian dollar, the Norwegian krone and the Russian ruble were all higher against the dollar for the week, but further gains are uncertain.
Mexico has delayed an OPEC + deal to cut oil production by 10 million barrels a day, agreed on Thursday, according to the Kuwaiti oil minister.
Investors reacted negatively to the first details of a supply-reduction agreement between OPEC members and its allies by selling crude oil futures, suggesting that these reductions may not be enough to offset a expected decline in global demand.