FOREX-Dollar set for biggest weekly gain in a month as stimulus talks falter
By Iain Withers
LONDON, Oct 16 (Reuters) - The dollar remained on track Friday for its biggest weekly gain in a month, as caution grew over a global surge in coronavirus cases and fading prospects for a U.S. stimulus package before the Nov. 3 election.
Fresh restrictions to combat COVID-19 have been introduced across Europe, and the U.S. Midwest is battling spikes in new cases as data show the country's economic recovery is losing steam.
Investors will get a further indicator of the health of the U.S. economy with retail sales data due later on Friday. Relief plans remain bogged down in a three-way negotiation between the White House, Senate Republicans and House Democrats.
The dollar and Japanese yen are both headed for weekly gains on investor appetite for safe haven assets, of 0.7% and 0.3% respectively. =USD, JPY=EBS
The dollar kept to a tight range in European trading on Friday and was last down 0.1%. The euro was up 0.1%. EUR=EBS
On a monthly basis, the dollar index is up 0.7%, its biggest rise since end-September.
"The fight against corona is not a sprint but a marathon, and that is becoming increasingly clear on the FX market too," Esther Reichelt, an FX analyst at Commerzbank, said in a note.
"The winners will be all those economies and their respective currencies that do best at overcoming the economic challenges posed by the pandemic ... Until then, the FX market will be dominated by risk considerations."
Sterling yo-yoed again amid fractious Brexit negotiations between the UK and European Union.
The pound gained as much as 0.5% in early trading on hopes a trade deal was possible, then turned negative after UK Prime Minister Boris Johnson said it was time to prepare for no deal. The pound was last down around 0.2%. GBP=D3
(Reporting by Iain Withers, Additional reporting by Tom Westbrook in Singapore, editing by Mark Heinrich, Larry King)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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