The US dollar edged lower against the euro on Friday, hurt by month-end flows and as the common currency continued to enjoy a boost from the EU’s recently announced plan to prop up the bloc’s coronavirus-hit economies with a 750 billion euro (US$828 billion) recovery fund.
The greenback was little moved after US President Donald Trump said that he was directing his administration to begin the process of eliminating special treatment for Hong Kong, in response to China’s plans to impose new security legislation in the territory.
“I think traders were bracing for the possibility of new tariffs or sanctions or a pullback on ‘phase one,’ which, of course, didn’t happen,” said John Doyle, vice president of dealing and trading at Tempus Inc in Washington.
The US dollar index, which compares the greenback with six major currencies, slipped 0.09 percent to 98.30, down 1.6 percent for the week and falling 0.7 percent for the month.
In Taipei, the New Taiwan dollar rose against the greenback, gaining NT$0.013 to close at NT$30.032, little changed from Friday last week’s NT$30.009.
The euro on Friday rose about 0.13 percent to US$1.1101, its fourth straight day of gains against the greenback.
The euro’s rally this week has pushed it over its 200-day moving average for the first time since late March and lifted it about 1.7 percent for the week, its best weekly gain in nine weeks.
Much of the euro’s move was driven by optimism generated by the European Commission’s stimulus plan announced this week, as well as investors’ improved appetite for risk-taking as global economies gradually move to reopen after coronavirus-linked shutdowns, analysts said.
Month-end adjustments to portfolio hedges, after a more than 3 percent rally this month for US stocks, was also weighing on the US dollar, AxiCorp Financial Services Pty chief global markets strategist Stephen Innes said.
Additional reporting by CNA, with staff writer
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