After dollar’s softest week in more than a month, the dollar seems to steady on Friday, as revived hopes for a new U.S. stimulus package to boost the world’s biggest economy had investors seeking out riskier currencies.
The U.S. Dollar Index, held near a one-month low in Asia and has slipped 0.9% this week, its largest weekly loss since August.
The New Zealand dollar made a fresh one-week peak of $0.6659, while the euro and Aussie held just below week highs made overnight.
Investors were held back and seems disappointed ahead of the U.S. jobs data due later in the day.
On Thursday, U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Munchin failed to bridge what Pelosi described as differences over dollars and values.
“Markets surely remain susceptible to the lack of a deal this of the election,” said National Australia Bank’s head of foreign exchange strategy, Ray Attrill.
The Australian Dollar was last steady at $0.7182 after climbing as high as $0.7209 overnight. It has so far posted a weekly gain of 2.2%, its best since August.
The Japanese Yen on the other hand, a safe-haven currency that tends to gain during periods of uncertainty, barley moved this week, suggesting a degree of caution remains. The yen last traded at 105.55per dollar.
Sterling had a rough overnight session, bouncing around on Brexit headlines before ultimately sinking as the European Union began legal proceedings over a British plan to undercut their divorce deal.
Investors are watching with concern as coronavirus infection rates climb in Europe and the U.S. and waiting crucial U.S. labour figures for a read on the economic recovery.
Madrid will become the first European capital to go back into lockdown in coming days to fight a steep surge in cases. A record increase in new cases in Wisconsin on Thursday, fanned fears of hospitals there being overwhelmed.
U.S. non-farm payrolls likely increased by 850,000 jobs in September, according to a Reuters survey of economists. That would leave employment 10.7 million below its level in February.
In the daily charts of GBP/USD, the pair opened at 1.2884 Friday morning in Sydney session.
As we can see in the support and resistance levels in the charts, the price bounced from the support level last September 25, 2020 and tried to push pound higher.
As the opening of this week’s last trading day, the dollar seems to be strengthening against the pound despite investors seeking out riskier currency. The reason for this may be the ongoing Brexit deal between U.K. and EU which might lead to a no-deal.
Further bearish confirmation will be acknowledged as soon as Monday next week by the sterling bears. The pair may end up breaking the support level to further confirm the weakening of the sterling against the dollar.
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