Dollar Edges Lower; Remains Near Multi-Month Highs

Dollar Edges Lower; Remains Near Multi-Month Highs

Dollar Edges Lower; Remains Near Multi-Month Highs © Reuters.

By Peter Nurse – The dollar edged lower in early European trading Friday, but remains near multi-month highs on the back of rising optimism about the U.S. economic recovery, helped by a strong rollout of coronavirus vaccines.

At 3:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 92.793, just below a four-month high of 92.868 reached overnight.

USD/JPY was up 0.1% at 109.25, near its highest since June, GBP/USD was up 0.1% at 1.3750, helped by retail sales posting a modest rebound in February after a brutal start to the year, climbing 2.1% on the month, while the risk-sensitive AUD/USD rose 0.5% to 0.7619.

The latest indication of the strength of the U.S. economic recovery came from Thursday’s weekly jobless claims data, which showed the number of people filing last week fell to a one-year low of 684,000 from the 781,000 claims filed during the previous week.

Later in the session the final print of the University of Michigan sentiment reading for March is expected to tick up as stimulus checks arrive and the country starts to reopen.

Other data, including personal spending and personal income in February, are due later in the day and could provide further hints about the U.S. economic strength.

Another positive driver for the greenback has been the strong start to the U.S. vaccination program, especially compared with the European equivalent.

President Joe Biden pledged on Thursday to double the U.S. vaccination rollout plan after reaching the previously set goal of 100 million shots 42 days ahead of schedule.

EUR/USD was up 0.2% at 1.1787, close to lows last seen in November last year, with the single currency suffering due to renewed coronavirus lockdowns and the slow pace of vaccinations across the European Union even as the region’s leaders meet to try and improve the situation.

Focus will turn to the release of the keenly-watched German business sentiment release later in the day, with the Ifo index expected to climb to 93.2 in March from 92.4 the previous month.

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