Sun, Feb 10, 2019 - Page 5 News List

US dollar caps best week in months on safe-haven moves

CONTINUING RALLY:US economic growth has remained stable while its peers lost momentum, which reignited a US dollar rally, a senior analyst said

Reuters, NEW YORK

The US dollar on Friday held steady against a basket of currencies, posting its strongest weekly gain in seven months, as traders piled into the greenback in a safe-haven move on worries about a weakening global economy.

The euro hovered at a two-week low with support at US$1.13. The single currency was briefly set for its steepest weekly drop in four months earlier on Friday in the wake of data that showed an economic slowdown in Europe was spreading.

“The rally that propelled the dollar broadly higher last year has enjoyed renewed life with US growth remaining solid while peers abroad lose momentum,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

The US dollar index, which tracks the greenback versus the euro, yen, sterling and three other currencies rose 0.07 percent to 96.64.

For the week, the index rose 1.1 percent, its biggest weekly increase since a 1.28 percent jump in the week of Aug. 10 last year.

The euro fell about 0.05 percent to US$1.133, putting its weekly decline at about 0.9 percent.

The European Commission on Thursday cut its growth and inflation forecasts as downside surprises to German and Spanish industrial orders fueled worries about an accelerating slowdown.

Those figure have weighed on local bond markets.

Core European government debt yields touched their lowest in over two years. Benchmark German yields were just 10 basis points away from zero percent.

With Chinese markets closed this week for Lunar New Year, market volatility declined.

Implied volatility in the euro, or expected swings in the single currency in a month, fell earlier this week to its lowest level since December 2017 before rebounding, according to Refinitiv data.

Anxieties about the global economy were compounded by comments from US President Donald Trump saying that he did not plan to meet with Chinese President Xi Jinping (習近平) before a March 1 deadline to achieve a trade deal.

That helped the perceived safe-haven currencies, such as the Japanese yen and the Swiss Franc, hold up against the US dollar.

The US dollar on Friday slipped to ¥109.75, but rose 0.2 percent for the week, while it fell 0.22 percent against the Swiss franc to SF1.00025.

Sterling was marginally lower at US$1.29, down 1.1 percent for the week.

Traders expect the pound to remain volatile because of the uncertainty surrounding Brexit.

The markets in Taiwan were closed for the Lunar New Year holiday.

Additional reporting by staff writer

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