· Dollar near one-month low, set for worst weekly showing since May
The dollar languished near a one-month low on Friday and was poised for its worst weekly performance since May as dovish remarks by the U.S. Federal Reserve together with underwhelming economic data took the steam out of a month-long rally.
The dollar index, which measures the greenbackagainst a basket of six other currencies, was last at 91.96 after going as low as 91.855 on Thursday, a level not seen since June 29.
For the week, the index is off 1%, its worst weekly showing since early May. For the month, the index is down 0.5% so far following a 2.8% rally in June.
The dollar held near a two-week low against the safe haven Japanese yen at 109.54
The euro climbed to a one-month high against the dollar to be last at $1.1880 ahead of preliminary second quarter gross domestic product data for France, Germany, Italy and the euro area as well as preliminary July inflation prints for France, Italy and the euro area. The euro area also gets June unemployment data.
The British pound hovered near its highest in over a month helped by the U.S. dollar’s weaker tone and a fall in coronavirus cases in Britain.
Investors will keep a close eye on a bunch of U.S. macro indicators due later in the day including second-quarter employment cost index, personal income and spending for June and the University of Michigan consumer sentiment index for July.
· Yuan eases, but set for best week in two months
China's yuan eased against the dollar on Friday but looked set for its best weekly gain in two months after sharp swings in investor sentiment during recent days.
The onshore yuan opened at 6.4638 per dollar and was changing hands at 6.4591 at midday, 25 pips weaker than the previous late session close.
If the spot yuan finishes the late night session at the midday level, it would have firmed 0.33% to the dollar - its biggest weekly gain since late May.
· Asian currencies may weaken in third quarter, gain strength in fourth quarter: BofA Securities
Claudio Piron of BofA Securities says the export cycle will drive currency appreciation in Asia and the region’s vaccination rates will improve toward the fourth quarter of 2021.
Reference: Reuters, CNBC
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