Speakers from Touchstone Exploration, Shanta Gold, Savannah Resources and Kavango Resources feature in our Natural Resources webinar on May 25th. Please register here.

Less Ads, More Data, More Tools Register for FREE

FOREX-Dollar heads for longest weekly losing streak in a decade

Fri, 14th Aug 2020 09:28

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

* Dollar supported as risk appetite wanes

* Dollar index heads for longest weekly losing streak since

* Yen headed for worst week in two months after U.S. yields

By Ritvik Carvalho

LONDON, Aug 14 (Reuters) - The dollar steadied on Friday as
a spike in U.S. bond yields and a drag on risk sentiment from
lacklustre Chinese economic data slowed a selldown of the U.S.
currency, which was headed for its longest weekly losing streak
since 2010.

China's retail sales unexpectedly extended their fall into a
seventh month in July and industrial output missed expectations
- suggesting bumps in even the world's most promising rebound.

The mood had the dollar within reach of snapping a
seven-week losing streak against the risk-sensitive Aussie
, which settled around $0.7149, flat for the week.

Tepid demand in a long-dated U.S. government bond auction on
Thursday also extended a surge in Treasury yields that has drawn
some investors - especially from Japan - back to dollars.

"Mixed tone across FX markets at the end of the week as
investors lack a clear directional catalyst in these quiet
summer markets," said Viraj Patel, FX and global macro
strategist at Arkera.

U.S. retail sales data today may inject a bit of impetus,
said Patel - especially as it will test the narrative that the
U.S. economy will lag in the post-pandemic recovery.

"Dollar crosses will continue to be driven by U.S. yields
and whether the corrective move higher - and mini U.S. bond
market tantrum - continues into next week," Patel said.

The yen was on course for its poorest week against
the dollar in two months and down about 0.9% at 106.74 from last
Friday's close.

The biggest loser this week has been the kiwi,
which was under pressure at $0.6538, as New Zealand deals with a
fresh coronavirus outbreak. Moreover, the central bank this week
flagged increased bond buying and again mentioned the prospect
of negative rates.

Against a basket of currencies, the U.S. dollar
remains 0.2% lower for the week, but it seems to have arrested a
slide that has it about 9.5% below its March peak. The dollar
index was headed for its eighth consecutive week of losses, its
longest weekly losing streak since June 2010.


Preliminary European employment and GDP numbers due at 0900
GMT and U.S. retail sales figures at 1230 GMT are the next set
of data for investors to parse for signs of divergence between
the U.S. and European recoveries.

Gathering faith in Europe's rebound, and concerns about the
U.S. response as the virus spreads and politicians remain
deadlocked over the next relief package, have kept the euro firm
even as the dollar has been able to bounce a bit elsewhere.

A fall last week in the number of applications for
unemployment benefits in the United States to below one million
provided a note of cheer but, with some 30 million out of work
and stimulus plans stalled, the outlook remains grim.

The euro slid 0.1% to $1.1806 in early London
deals on Friday and the pound was a shade higher at
$1.3072, as investors sought to focus on a rebound in growth in
June rather than a stunning 20% quarterly contraction.

Another element of divergence has opened between Australia
and New Zealand, whose central banks are striking quite a
different tone.

The Reserve Bank of New Zealand (RBNZ) sparked a bond rally
this week by promising to extend its own purchases and, next
week, speed them up as well.

But while the RBNZ talked about sub-zero rates, Reserve Bank
of Australia Governor Philip Lowe reiterated on Friday that
fiscal support was what was needed.

"The key takeaway from the RBNZ meeting is that they’re
preparing more loosening measures to use if necessary, including
not only negative rates but also buying foreign assets – a
deliberate effort to weaken the currency," said Marshall
Gittler, head of investment research at BDSwiss.

"The market is just doing it for them, thereby saving the
RBNZ some money."
(Reporting by Ritvik Carvalho; additional reporting by Tom
Westbrook in Singapore; Editing by Kevin Liffey)

More News

LIVE MARKETS-Inflation haunts the data: Empire State, homebuilder sentiment

* Major U.S. indexes rd; chip stocks weak, retail slightly green* Tech weakest major S&P sector; energy leads gainers* Euro STOXX 600 index ~flat* Dollar ~flat; gold, crude rise; Bitcoin down ~5%* U.S. 10-Year Treasury yield ~1.64% Welcome to the h...

Today 16:30

UPDATE 1-Sterling consolidates gains as Britain enters second phase of reopening

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv (Updates prices, adds further background and analyst comment)By Ritvik CarvalhoLONDON, May 17 (Reuters) - Sterlin...

Today 16:15

Kodal Minerals secures drill rigs for Cote d'Ivoire exploration

(Sharecast News) - Lithium-focussed exploration and development company Kodal Minerals updated the market on exploration on its Cote d'Ivoire gold assets on Monday, confirming that it had secured two drill rigs for the Nielle Project in the north of the country.

Today 16:11

UPDATE 1-UK sanctions Myanmar Gems Enterprise in bid to cut off junta funding

(Adds Raab, context)LONDON, May 17 (Reuters) - Britain announced sanctions against state-owned enterprise Myanmar Gems Enterprise (MGE) on Monday, saying the move would deprive the military junta there of a key source of funding.The United States ...

Today 16:10

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.