Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

FOREX-Dollar falls to one-week lows on data hopes

Published 02/07/2020, 08:31
Updated 02/07/2020, 08:36
© Reuters.

© Reuters.

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Saikat Chatterjee
LONDON, July 2 (Reuters) - The U.S. dollar slipped to a
one-week low against its rivals on Thursday as upbeat U.S. and
European economic data sharpened risk appetite, with hopes for a
COVID-19 vaccine breakthrough also helping sentiment.
Against a basket of currencies, the greenback is on track
for its biggest weekly drop in a month, of 0.4%. However, it
could swing in either direction depending on U.S. jobs data due
at 1230 GMT.
Non-farm payrolls figures are expected to show an increase
of 3 million jobs last month. But estimates vary widely amid concerns about whether the
U.S. economy can sustain its recovery as coronavirus infections
surge and some states reimpose limits on business and personal
activity.
"A renewed significant fall in the unemployment rate would
make the market feel confident about a recovery," said Thu Lan
Nguyen, an FX strategist at Commerzbank in Frankfurt.
"In that case we would see risk-on, which should
theoretically be negative for the U.S. currency since the U.S.
dollar has been in demand as a safe haven during the crisis,"
Despite the dollar's recent spell of weakness, the greenback
is still up 2.5% from the 2020 low of 94.6 it hit in early
March. A Reuters poll predicts more weakness for the greenback
over the next 12 months due to weak global demand. Supporting sentiment in the meantime was news that a
COVID-19 vaccine developed by German biotech firm BioNTech
BNTX.O and U.S. pharmaceutical giant Pfizer PFE.N had shown
potential in early-stage human trials. U.S. manufacturing activity also rebounded more than
expected in June, with the Institute for Supply Management's
manufacturing activity index hitting its highest in 14 months.

Similar surveys from China, Germany and France all pointed
to an improvement in factory activity.
The positive risk sentiment boosted other risk-oriented
currencies such as the New Zealand dollar NZD=D3 , which gained
nearly 0.5% versus the greenback, and the euro EUR=EBS , which
advanced 0.1% to $1.1264.
The mood also lifted sterling GBP=D3 above $1.25 for the
first time in a week. It last sat at $1.2482, having bounced
almost 2% from a one-month low hit on Monday.
Falling volatility also boosted sentiment, with a gauge of
currency market volatility .DBCVIX holding near a one-month
low.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.