Dollar holds firm as risk aversion hammers Canadian dollar

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Dollar holds firm as risk aversion hammers Canadian dollar



The safe-haven U.S. dollar hovered near a 9-1/2-month high against major peers on Friday, buoyed by fears that the Delta coronavirus variant could delay the global economic recovery.To get more news about easyMarkets, you can visit wikifx.com official website.
　　The greenback has also been boosted by expectations the Federal Reserve could still start to taper stimulus this year, even with COVID-19 infections surging this month in the United States.
　　The dollar index, which measures the currency against six rivals, was little changed at 93.544 from Thursday, when it touched 93.587 for the first time since early November. For the week, it's on track to gain 1.1%, the most in two months.
　　The Canadian dollar dropped to a fresh six-month low of C$1.2832 amid a plunge in oil prices on those economic growth worries, while the Aussie and New Zealand dollars languished near nine-month lows.
Risk aversion in the air has buoyed the greenback, with pro-growth currencies bearing the brunt of it,” Rodrigo Catril, a strategist at National Australia Bank (OTC:NABZY), wrote in a client note.
　　The yen, another safe-haven currency, slipped 0.1% to 109.87 per dollar on Friday, but remains in the centre of its trading range of the past six weeks.
　　The euro ticked up 0.05% to $1.6825, but still traded near the 9 1/2-month low of $1.16655 reached overnight. It is down 0.94% this week, the most since mid-June.
　　Minutes of the Fed's July meeting, released on Wednesday, showed officials largely expect to reduce their monthly bond buying later this year, although divisions remain on the timing and pace of a taper, and whether inflation, joblessness or the coronavirus pandemic pose a bigger risk to economic recovery.
　　A decline in debt purchases by the Fed is widely considered positive for the dollar as it is expected to raise U.S. government bond yields, making it more attractive for investors to hold dollar-denominated assets.
　　The Aussie rose 0.1% to $0.7155 on Friday, but was still close to the 9 1/2-month low of $0.7143 reached on Thursday. It has fallen 3% this week, on track for its worst performance since September of last year, with most of the country under lockdown to battle a COVID-19 outbreak.
　　New Zealand's kiwi ticked up 0.1% to $0.6832, but remained near Thursday's nine-month trough of $0.6810. It has sunk 2.9% for the week, also the worst since September, after its central bank delayed a rate hike, shifting gears as the country went into a snap COVID-19 lockdown.
　　Sterling touched a fresh one-month low of $1.3628 on Friday, before trading 0.07% higher at $1.3638. It has fallen 1.64% this week, which would be the biggest drop for two months.

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