US$ inches up; focus on surge in virus cases
New York
THE safe-haven US dollar edged higher in choppy trading on Friday, moving within narrow ranges, as investors grew cautious about a resurgence in US Covid-19 cases that has fuelled doubts on expectations of a V-shaped recovery for the world's largest economy.
Currencies that thrive with higher risk appetite, such as sterling and those linked to commodities like the Australian, New Zealand and Canadian dollars, struggled against the greenback.
The US Centers for Disease Control and Prevention (CDC) on Friday reported 2,414,870 US cases of Covid-19, an increase of 40,588 from its previous count, and said deaths had risen by 2,516 to 124,325.
Florida and Texas are leading the surge in new US cases. Both states on Friday ordered bars to once again close down and imposed tighter restrictions on restaurants in a setback to efforts to open up their economies during the pandemic.
In afternoon trading, the dollar was slightly higher against a basket of currencies 97.426.
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The dollar reacted little to data showing US consumer spending, which accounts for more than two-thirds of US economic activity, jumped 8.2 per cent last month, the largest increase since the government started tracking the series in 1959.
That said, personal income fell 4.2 per cent last month.
"On balance, the mixed numbers validate the view that the economy has weathered the worst of the virus but underscore what's expected to be a choppy road to recovery," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The euro, meanwhile, edged higher against the dollar in see-saw trading to US$1.1225.
Traders said there were US$2 billion in option expiries in the currency pair that went off earlier in the session at the US$1.12 strike.
On the week, the euro posted weekly gains of 0.4 per cent against the dollar.
Bank of America Merrill Lynch's trading platforms and broader positioning surveys indicate currency markets are long euro/dollar, though positioning is not stretched.
The dollar was little changed against the yen at 107.17 yen.
In other currencies, the commodity-tied units fell as risk appetite weakened, with the Australian dollar down 0.3 per cent against the US dollar at US$0.6864.
The US dollar gained 0.1 per cent at C$1.3653. REUTERS
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