By Peter Nurse
Investing.com - The U.S. dollar edged lower in early European trade Friday, on course to post a weekly loss on dovish signals from the Federal Reserve.
At 02:55 ET (07:55 GMT), the Dollar Index , which tracks the greenback against a basket of six other currencies, fell 0.1% to 105.840, down more than 1% for the week and close to its three-month low of 105.30 hit last week.
The dollar has struggled of late as expectations of a less aggressive pace of U.S. monetary tightening as soon as next month saw U.S. Treasury yields sink to seven-week lows earlier Friday.
“The Fed minutes surprised on the dovish side, signaling strong support for slower rate hikes and weaker support for Powell's higher-for-longer rhetoric,” said analysts at ING, in a note. “The dollar could stay pressured for a bit longer, but it's probably embedding a good deal of Fed-related negatives now.”
Activity is likely to be limited Friday, with traders taking advantage of Thursday’s U.S. Thanksgiving holiday to enjoy a long weekend, and attention will quickly shift to next week and the release of U.S. jobs and growth data for interest rate implications.
EUR/USD rose 0.1% to 1.0418, approaching the four-month high of 1.0481 hit last week, helped by data showing Germany's economy grew by a little more than initially thought in the third quarter.
Additionally, market research firm GfK said German consumer confidence posted a second straight improvement for December, while remaining close to an all-time low at -40.2.
GBP/USD fell 0.2% lower to 1.2087, but is still close to the three-month high of 1.2153 hit in the previous session with the pair on track for a near 2% weekly gain.
The risk-sensitive AUD/USD rose 0.1% to 0.6765, NZD/USD slipped 0.1% to 0.6257, while USD/CNY rose 0.1% to 7.1574 with the yuan weakening as the Chinese economy struggles with a record-high jump in daily COVID-19 cases, which saw the reintroduction of strict curbs in several major cities.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.