Dollar Gaining Support on Coronavirus And Chinese Data

The dollar stabilized as a jump in US Treasury yields and a drop in sentiment due to weak economic data from China put an end to the global reserve currency sell-off.

Retail sales in China continued to decline for the seventh month in July unexpectedly, and industrial production missed expectations, indicating a faltering in the most promising recovery in the world.

The general sentiment pushed the dollar close to ending a series of losses against the risk-sensitive Australian dollar, which reached about $ 0.7149 at settlement and was stable for the week.

The yen is heading towards recording its weakest weekly performance against the dollar in two months, down about 0.9% at 106.84 from last Friday’s closing level.

The New Zealand dollar was the biggest loser, as it fell to 0.6538 US dollars, at a time when the country is facing a new outbreak of Coronavirus, and after the central bank this week hinted to increase bond purchases and mentioned again the possibility of adopting negative interest rates.

Against a basket of currencies, the dollar remained down 0.2% for the week, but it appears to have halted a slide that caused it to decline 9.5% below its peak in March.

Preliminary data on employment and GDP are due in Europe, and US retail sales numbers are the next set of data that investors will analyze for indications on the differences between the recovery in the US and Europe.

The euro consolidated at $ 1.1816 in the Asian session today, and the British pound settled at $ 1.3062, as investors to focus on the recovery of growth in June instead of the negative quarterly contraction.