SINGAPORE (Reuters) – The dollar was approaching its worst week of the year on Friday as unexpectedly strong economic data from Europe, disappointing US employment data and a resolutely accommodating Federal Reserve prompted investors to abandon some of the dollar rates.
The euro and yen are also poised for their biggest weekly percentage gains in five months, while the dollar index, which fell 1% this week, is near a two-week low of 92.066.
“In short, the energy got out of the dollar rebound in the first quarter, as well as the sale of bonds,” said Keith Jukes, head of monetary strategy at Societe Generale.
Early in the Asian session, the euro was above its 200-day moving average at $ 1.1916, close to Thursday’s two-week high of $ 1.1928, while the yen broke its 20-day moving average at 109.325. for the dollar. The euro is up 1.4% against the dollar this week, while the yen is up 1.3%.
The euro also gained more than 2% against the pound this week, bouncing from an annual low of 84.70p on Monday to 86.81p in Asia on Friday amid growing concerns over UK dependence on the AstraZeneca vaccine. The pound sterling fell sharply against the dollar this week and fell half a percentage point to $ 1.3744.
The vaccine, developed at Oxford University and considered to be the leader in the global vaccination race, suffers from safety and supply issues. Australia and the Philippines curtailed use of the snapshot on Thursday, while the African Union scrapped plans to buy it.
In terms of data, overnight data showed that jobless claims in the US rose unexpectedly, easing the pressure slightly after a huge job report last week. Meanwhile, the rise in prices at the plant in Europe accelerated in the wake of unexpectedly strong growth in business activity.
Fed leaders also pledged again that monetary policy would be very simple, even after some once-positive signals from economic data. Chairman Jerome Powell said policy will not change until there is at least a few months of such data, while board member James Bullard said the Fed should not even discuss the change until it is clear that a pandemic ended.
Treasuries rallied amid job fluctuations and Fed commentary, pushing the underlying 10-year yield, which falls on higher prices, to a two-week low of 1.6170%. [US/]
This has further deprived the dollar of its recent appeal, while broadly bullish sentiment in equity markets has also provided some support for risk-sensitive currencies Australia and New Zealand, which have peaked in recent ranges.
The Australian dollar was last traded at $ 0.7657, up 0.8% over the week, while the kiwi climbed to $ 0.7060, up 0.6% over the week.
“Markets are rethinking the US dollar exclusivity,” analysts at ANZ Bank said Friday.
“Stronger US growth should benefit all global cyclical assets, including the New Zealand dollar and Asian currencies, and this seems to be the main topic right now.”
Tom Westbrook Reporting; Edited by Ana Nicholasi da Costa