The US dollar ticked lower on Friday as investors, cautiously optimistic about the results of a drug trial and US President Donald Trump’s plan to reopen the US economy, regained some appetite for risk.
Sentiment was boosted overnight by a media report detailing encouraging partial data from experimental drug trials on severely ill COVID-19 patients at a University of Chicago hospital.
News of Trump’s plans to reopen the world’s largest economy was also taken by investors as a positive sign, even after Thursday’s data showed that 22 million Americans sought unemployment benefits in the past month.
The overnight moves toppled the US dollar, which has closely tracked risk sentiment through the COVID-19 pandemic, from a week high, with the US dollar index falling 0.3 percent to 99.72, up 0.2 percent for the week.
In Taipei, the New Taiwan dollar rose slightly against the greenback to NT$30.102, virtually unchanged from last week’s NT$30.103.
The US dollar also fell against the euro and the British pound on Friday, although it strengthened against the Japanese yen and the Swiss franc.
“I think there was general optimism today so the dollar took a modest backseat,” said John Doyle, vice president for dealing and trading at Tempus Inc.
“But overall, the dollar will remain king in the coming months. Even as we come off of the dollar highs of last month, it will stay historically strong,” Doyle said.
As the US dollar fell, the euro rose 0.3 percent. The euro has fallen about 1.46 percent against the dollar this month, facing its biggest monthly fall since July last year, after hitting its lowest against the Swiss franc in almost five years earlier this week.
With French President Emmanuel Macron warning that the EU could collapse unless it finds a way to share the costs of the crisis, the coronavirus has exposed the vulnerability of the euro.
“EUR’s status might have been evolving since the COVID-19 outbreak but, going forward, we are bearish. This is because we expect European data to decouple further from US data, and that is partly due to the lack of a coordinated European fiscal response — which we remain concerned about,” Bank of America strategists wrote in a note to clients.
Additional reporting by CNA, with staff writer
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