Dollar down, consolidating after week’s gains By Investing.com

LYNXNPEE1F13X_L.jpg

© Reuters.

By Peter Nurse Investing.com – The dollar fell in early European trading on Friday, consolidating after strong gains this week fueled by growing confidence in the US economic recovery. At 3:55 a.m. ET (0755 GMT), the dollar index, which tracks the dollar against a basket of six other currencies, was down 0.1% to 91,523, but headed for its best week in three months after touching. 91.60 for the first time. since the beginning of December. fell 0.1% to 105.51, remained flat at 1.1961, after previously falling to 1.1952, a level not seen since Dec. 1, while risk sensitive rose 0.1% to 0.7601. The dollar has made a lot of friends lately, and the index is on track for a 1.1% weekly rise, the highest since Nov. 1, after a 0.3% rise the previous week. This sentiment has improved on the prospect of a strong shock from the administration of President Joe Biden, rising Treasury yields and the continued launch of vaccines, turning the dollar from a safe haven to a risky currency. Signs of an improving US economy have also helped. Thursday’s data revealed that 779,000 were filed during the past week, an improvement from the 812,000 claims reported during the previous week. There is more US employment data to be released later on Friday, in the form of the January report, and it is expected to show a gain of 50,000 jobs after the 140,000 drop in December. By contrast, Germany fell for the first time in eight months after the spread of the coronavirus forced the euro zone’s largest economy and many of its trading partners to crash. “Short-term risks remain to the downside of the EUR / USD, given the positioning and slow pace of the EZ vaccination,” ING analysts said in a research note. Elsewhere, it rose 0.1% to 1.3683, after the Bank of England noted that negative interest rates are less likely. He rose to -0.02% and it looks like it will turn positive for the first time since May. . However, the central bank also signaled a rapid rebound in growth in the second half of 2021 as the country’s vaccination program gathers steam. Government projections suggest that all adults in the UK could be vaccinated in June. By contrast, Germany does not expect to reach that milestone until September. “The latest decision by the Bank of England keeps the door open to negative rates, albeit only after a six-month period of industry preparation,” ING added. “But optimistic growth forecasts suggest that a foray into subzero rates is increasingly unlikely in the current cycle.”

Disclaimer: Fusion Media wishes to remind you that the data contained on this website is not necessarily accurate or in real time. All CFDs (stocks, indices, futures) and Forex prices are not provided by exchanges but by market makers, so the prices may not be accurate and may differ from the actual market price, which means that prices are indicative and not appropriate for commercial purposes. Therefore, Fusion Media assumes no responsibility for any business losses you may incur as a result of the use of this data. Fusion Media or anyone involved with Fusion Media will not accept any responsibility for loss or damage as a result of reliance on information, including data, quotes, charts, and buy / sell signals contained on this website. Be fully informed about the risks and costs associated with trading the financial markets, it is one of the riskiest forms of investment possible.