The safe-haven US dollar on Friday slipped from a nine-and-a-half-month high as risk appetite improved, with equities gaining and benchmark US Treasury yields higher, although the near-term outlook for the greenback remained upbeat.
The US currency remained supported overall by concerns that the Delta variant of SARS-CoV-2 could derail global economic recovery just as central banks begin to reverse COVID-19 pandemic-related stimulus.
The US dollar index, which measures the US currency against six rivals, rose to as high as 93.734 for the first time since early November last year, before trading 0.1 percent lower at 93.491. For the week, it posted a 1 percent gain, the most in two months.
In Taipei, the New Taiwan dollar fell against the greenback, losing NT$0.039 to close at NT$28.008, falling 0.5 percent for the week.
While moves in currency markets were much more contained than on Thursday as equity markets steadied, the risk-sensitive Australian and New Zealand dollars were mixed, but their overall bias remained tilted to the downside.
“In the near term, we expect the dollar to appreciate a bit further,” Capital Economics senior markets economist Jonas Goltermann wrote in his latest research note.
“We think that robust growth in the US relative to other major economies and a gradual tightening of monetary policy will put further upward pressure on the greenback,” he wrote.
The Australian dollar sank to a new nine-and-a-half-month low of US$0.7107, and was down 0.2 percent at US$0.7137. On the week, the Aussie fell 3.3 percent, its worst weekly performance since September last year, as a COVID-19 lockdown on Sydney was extended by a month.
The New Zealand dollar dipped to a new nine-month trough of US$0.6807 at one point. It last traded up 0.2 percent at US$0.6838.
The Canadian dollar dropped to an eight-month-low of C$1.2948 per US dollar and was last at C$1.2840, down 0.1 percent against its US counterpart as oil prices fell further because of worries about the global economy.
Norway’s krone dropped for a second day as weaker oil prices and general nervousness among investors hit the currency despite the Norwegian central bank on Thursday sticking to its plan for an interest rate hike next month.
The euro was up 0.2 percent at US$1.1697, not far from the nine-and-a-half-month low of US$1.1665 reached overnight.
Against the yen, another safe-haven currency, the US dollar was flat at ￥109.80.
The British pound slipped to one-month lows versus the US dollar, and was last down 0.1 percent at US$1.3622.
Additional reporting by CNA, with staff writer
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