Dollar set for small weekly gain on safe-haven demand

  • Friday 19, June 2020 08:22 PM
  • Dollar set for small weekly gain on safe-haven demand
Sharjah24 – Reuters: Fears of a second wave of coronavirus infections have increased demand for safe-haven assets, putting the U.S. dollar on track on Friday for its best weekly gain in a month.
Markets this week have been focused on an uptick in coronavirus cases in many U.S. states, as well as new infections detected in Beijing, raising fears of a return to global lockdowns. The world's reserve currency, which made small advances in the North American session, has gained 0.51% this week against a basket of currencies, its best performance since mid-May.

The dollar was up 0.18% near midday to 97.61, close to its highest levels since June 2.

The euro was slightly weaker, down 0.12% at $1.119, as an EU summit, in which the bloc will seek to bridge regional divisions over a 750 billion coronavirus recovery fund, got underway. European Central Bank head Christine Lagarde told EU leaders that their economy was in a "dramatic fall" and called on the bloc to act to spearhead revival, diplomatic sources and officials said.

Sweden, Denmark, Austria and the Netherlands - the bloc's so-called "frugal four" - say the proposed recovery fund is too big and the allocation of money not sufficiently linked to the pandemic.

"Hopes of a breakthrough on the recovery fund have been managed downwards recently, and the signs are instead pointing to an agreement no sooner than an as-yet unscheduled summit meeting in July," Deutsche Banks analysts told clients in their morning note.