US$ posts best week in 6 months, euro dips
New York
THE dollar edged higher against a basket of currencies on Friday, ending its strongest week in six months, as traders piled into the greenback in a safe-haven move on worries about a weakening global economy.
The euro hovered at a two-week low with support at US$1.13. The single currency still posted its steepest weekly drop against the dollar in over four months in the wake of data that showed an economic slowdown in Europe was spreading.
An index that tracks the greenback versus the euro, yen, sterling and three other currencies was up 0.13 per cent at 96.634. On the week, the ICE dollar index was up 1.1 per cent, its biggest weekly increase since a 1.28 per cent jump in the week of Aug 10, 2018.
The euro was down 0.13 per cent at US$1.13230 for a weekly decline of 1.1 per cent, which was its biggest weekly fall since late September.
The European Commission cut its growth and inflation forecasts on Thursday as downside surprises to German and Spanish industrial orders fuelled worries about an accelerating slowdown. Those figure have weighed on local bond markets. Core European government debt yields touched their lowest in over two years. US yields also fell on the week, holding above the lows of their recent trading range.
With markets in China closed for Chinese New Year during the week, market volatility declined. For example, implied volatility in the euro, or expected swings in the single currency in a month, fell earlier in the week to its lowest level since December 2017 before rebounding, according to Refinitiv data.
Anxieties about the global economy were compounded by comments from US President Donald Trump indicating he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal. That helped the perceived safe-haven currencies such as the Japanese yen and the Swiss Franc hold up against the dollar. The dollar was last at 109.785 yen, while the greenback was down 0.23 per cent at 1.00015 Swiss franc.
Sterling was marginally lower at US$1.2938 for its biggest weekly drop since October. Traders expect the pound to remain volatile because of the uncertainty surrounding Brexit. REUTERS
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