Dollar set for weekly gain on stalled economic recovery

16.10.2020 - Evdokimov Roman
Dollar set for weekly gain on stalled economic recovery

The dollar is on course for its best week of the month on Friday as rising coronavirus cases and little progress in a U.S. stimulus package prompted investors to seek safer assets.

The dollar index rose to a two-week high of 93.910 as Europe and Britain reimposed restrictions. The U.S. Midwest is also battling record spikes in new coronavirus cases as temperatures drop.

Risk currencies were hit hardest with the Aussie falling nearly 1% to a more than two-week low of $0.7057. The kiwi slid 1% to $0.6577, while the Norwegian krone fell 2.4% this week.

The euro lost 0.3% on the dollar overnight and fell 1% for the week. The dollar index rose 0.8% so far this week, its biggest weekly rise since end-September.

Demand for the dollar even pushed the safe-haven yen lower on Thursday. Although, it steadied at $105.38 and is up 0.2% for the week.

The lockdown fears driving the selloff came as hopes for a U.S. stimulus ahead of the presidential election is fading. 

The pound dropped over 0.8% to $1.2891 on worries about the EU-Britain post-Brexit talks. 

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