Dollar Set For Strong Weekly Gain

FxPremiere.com – Daily Forex Signals – The dollar was largely flat in Europe early Friday, maintaining the week’s gains on a safe haven bid amid rising Covid-19 cases worldwide.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded flat at 92.620, edging towards gains of around 0.5% for the week which, if sustained, would mark its biggest weekly percentage gain in a month.

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EUR/USD was marginally lower at 1.1808, GBP/USD slipped slightly to 1.3822, while the risk-sensitive AUD/USD rose 0.1% to 0.7435, but is down 0.7% over the week.

The Week Ahead

USD/JPY rose 0.1% to 109.98 after the Bank of Japan kept its interest rates unchanged at a policy meeting, while cutting its forecast for the current fiscal year’s growth to 3.8% from April’s 4.0% forecast.

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Rising Covid-19 cases, mainly in southeast Asia, but also in Europe and the U.S., have turned many traders risk averse, to the benefit of the dollar.

Dollar Faces Weekly Drop Again

In Australia, Melbourne has joined Sydney in lockdown, meaning around 40% of the country’s population are suffering from restrictions; Indonesia is now fighting a “worst-case scenario” epidemic, according to a senior minister; South Korea, previously a Covid success story, has been suffering from a new wave of persistent infections; while Japan has declared a state of emergency around Tokyo, meaning the upcoming Olympics will take place without spectators. Los Angeles county meanwhile has reinstated its mask mandate for indoor environments.

Dollar heads for third weekly gain

“With the Fed expected to start the QE tapering later this year and our economists’ view that the hiking cycle with start in 2H22 (with two rate hikes), the dollar downside vs the low yielding G10 FX (where central banks should remain cautious both this year and next) should be rather limited,” said analysts at ING, in a note.

Dollar extends post-payrolls pullback

Elsewhere, NZD/USD rose 0.5% to 0.7014 after New Zealand’s consumer price index for the second quarter grew 3.3% year-on-year and 1.3% quarter-on-quarter, a decade high.

The Reserve Bank of New Zealand is now widely expected to hike interest rates in August, earlier than expected.

Dollar Set For Strong Weekly Gain

Risk Markets Sell the EURUSD

Dollar Set For Strong Weekly Gain

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