Forex Signals – Dollar Weakens
FxPremiere.com – The dollar weakened in early European trade Friday, amid doubts about the pace with which the U.S. economy will rebound from the coronavirus-inspired slowdown.
At 2:55 AM ET (0655 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 92.662. USD/JPY was down 0.2% at 105.57, while EUR/USD was up 0.1% at 1.1868.
Dragging the greenback lower was the news Thursday that applications for U.S. unemployment benefits increased, defying consensus forecasts for a further decline, while the Philadelphia Fed reported a disappointing reading for its manufacturing index.
This came a day after the Federal Reserve warned that the path to U.S. economic recovery from the Covid-19 outbreak remained highly uncertain, with the recovery in hiring starting to slow – Forex Signals – Dollar Weakens
Forex – Dollar Weakens as Risk
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The euro has been the biggest beneficiary of a recent decline in the dollar, but this tone could be tested with the release of eurozone manufacturing data later in the session.
Forex Signals – Dollar Weakens Ahead of Sterling
That said, “the EUR has much further to go when/if the market realizes that the tail risks in the EUR are much smaller now compared to 9-12 months ago,” Larsen said, adding that the USD could weaken by as much as 20-25% over the coming two years, aiming “for (at least) >1.25 levels in EUR/USD.”
Elsewhere, GBP/USD traded 0.2% higher at 1.3240, helped retail sales rising above their pre-coronavirus level in July, as shops selling non-essential goods opened again after the lockdown in March.
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Retail sales volumes rose by a much stronger than expected 3.6% from June and were 1.4% higher than in July 2019, the Office for National Statistics said, representing a sharp recovery from double-digit falls in April and May.
Additionally, USD/CNY dropped 0.1% to 6.9071, after earlier falling below 6.90 for the first time since January.
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