Dollar gains on US election caution, surging Covid-19 cases

New York

THE safe-haven dollar rose to a four-week high on Friday, moving within narrow ranges, amid jitters ahead of next week's US presidential election and the continued surge in global novel coronavirus cases that has forced lockdowns in parts of Europe.

The greenback posted its largest weekly percentage gain since late September, with investors scooping up dollars due to fears of a contested election and the economic impact of renewed lockdowns in France, Germany and some regions of Spain.

The US recorded its 9 millionth case on Friday, nearly 3 per cent of the population, with almost 229,000 dead since the outbreak of the pandemic early this year, according to a Reuters tally of publicly reported data.

In afternoon trading, the dollar index rose 0.2 per cent to 94.035. On the week, the index was up 1.4 per cent, its best weekly performance in more than a month.

"This could well be election jitters although we have had the election on our calendar for a long time," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.

The euro fell 0.3 per cent to US$1.1643, after sliding to a four-week low of US$1.1640. The euro remains pressured overall after the European Central Bank on Thursday flagged further monetary easing in December.

FX volatility gauges for euro-dollar and most other major currencies were elevated, with that in the single currency at more than 10 per cent on Friday.

The greenback was little changed against the yen at 104.66 yen, after rallying overnight from a five-week trough as it benefited from a rebound in US Treasury yields and broad dollar buying.

Some commodity currencies took another spill on Friday.

Norway's kroner had managed to steady at 9.57 per dollar but only after a near 3.5 per cent weekly skid, while Canada's dollar was facing its worst week since April.

Against the Chinese yuan in the offshore market, the dollar fell 0.2 per cent to 6.6945 yuan. REUTERS