· Dollar hits new 9-1/2 month high as FX traders seek safety
The U.S. dollar hit a new 9-1/2-month high against major peers on Friday, buoyed by fears that the Delta coronavirus variant could delay the global economic recovery just as central banks begin to reverse pandemic-era stimulus.
The dollar index, which measures the currency against six rivals, rose as high as 93.597 for the first time since early November, before trading little changed at 93.535. For the week, it is on track to gain about 1%, the most in two months.
The euro rose 0.1% to $1.1682, but still traded near the 9-1/2-month low of $1.16655 reached overnight. It is down nearly 1% this week, the most since mid-June
The yen, another safe-haven currency, fell slightly versus the dollar 109.69.
Sterling slipped to one-month lows versus both the dollar and the euro.
The Chinese yuan sank to a new three-week low of 6.51 per dollar in the offshore market before trading about 0.1% weaker at 6.505.
Emerging markets have also had a bruising week. A regulatory crackdown in China and the concerns over growth and COVID-19 have sent investors looking for safer assets.
· GBP/USD risks further decline near term – UOB
24-hour view: “We highlighted yesterday that ‘the underlying tone still appears to be soft and we continue to see scope for GBP to test the major support at 1.3700’. Instead of ‘testing’ 1.3700, GBP cracked the level and plunged to 1.3631. The weakness in GBP is clearly oversold but with no signs of stabilization just yet, GBP could decline further. That said, last month’s low near 1.3575 is likely out of reach for now (there is another support at 1.3600). On the upside, a break of 1.3690 (minor resistance is at 1.3665) would indicate that the current weakness has stabilized.”
· Delta, Taper Fears Boost US Dollar, Risk-Off Extends
· China sets yuan mid-point at 4-month low, but basket index advances further
China’s central bank on Friday set its official yuan midpoint at the weakest level in four months to reflect falls in spot prices a day earlier.
The People’s Bank of China (PBOC) set the midpoint at 6.4984 yuan per dollar prior to the market open, 131 pips or 0.2% softer than the previous fix of 6.4853, and the weakest since April 21.
However, the weakened official guidance rate has pushed China’s trade-weighted yuan basket index higher again to 99, the highest since March 9, 2016, according to Reuters’ calculations based on official data.
· Most Asian currencies weaken, Indonesian rupiah leads losses
Reference: CNBC, Reuters, FXStreet
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