The US dollar slipped on Friday as its safe-haven allure diminished on hopes of a potential treatment for COVID-19, which outweighed concerns about a surge in infections in the US and around the world.
The US currency posted its largest weekly percentage loss against a basket of major currencies in a month.
The US dollar index slipped 0.05 percent to 96.66, down 0.5 percent for the week.
The US dollar also slid after US producer prices unexpectedly fell 0.2 percent last month, following a 0.4 percent rebound in May, as the economy battles depressed demand amid the COVID-19 pandemic.
In Taipei, the New Taiwan dollar fell against the greenback, losing NT$0.032 to close at NT$29.613, little changed from last week’s NT$29.609.
Reflecting the market’s increased risk appetite, the euro on Friday rose 0.2 percent against the US dollar to US$1.13, while the British pound rose 0.1 percent to US$1.2631.
The US dollar also fell to a two-week low against the safe-haven yen. It fell about 0.3 percent to ¥106.90, down 0.4 percent for the week.
The yen has been trading in a narrow range, despite the ebbs and flows of risk sentiment, as one-month implied and historical volatility close to its record low.
However, according to Monex, technical indicators in the options market are signaling investor concerns about future outbreak in volatility.
“The options market foresees increasing volatility risks in the barely flat dollar/yen pair through the second half of the year, similar to warnings during the financial crisis,” Monex analysts said in a note.
The Chinese yuan in the offshore market was down about 0.2 percent at 7.0114 per US dollar, having touched a near-four-month high of 6.9808 on Thursday.
The Chinese currency has gained almost 1 percent this week, supported by hopes of capital inflows as share prices rebounded after Beijing indicated that it wants a healthy bull market.
On Friday, Gilead Sciences Inc said additional data from a late-stage study showed its antiviral remdesivir reduced the risk of death and significantly improved the conditions of severely ill COVID-19 patients.
That helped a rally in US stocks and pushed the US dollar lower.
“When we talk about the dollar these days, it’s about the correlation with risk and that’s still happening now,” said John Doyle, vice president for dealing and trading at Tempus Inc in Washington.
“I think the vaccine news is offsetting the surge in cases,” he added.
However, analysts have said currency investors might be looking forward to the treatments being developed for the virus.
Additional reporting by CNA, with staff writer
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