The dollar slipped on Friday heading into the weekend, with the United States dollar index (DXY) hitting a four-session low of 92.14. Some foreign currencies traders said in a forum that a shift toward risk-taking lifted yields, but also unwound dollar positions that were taken during the week, pulling down the dollar.
The US data calendar was light on Friday and will be again on Monday, but it picks up quickly with the major mid-month inflation, retail sales and industrial production data all scheduled for next week.
A summary of Friday’s foreign exchange action shows that EUR-USD headed to near highs of the week, topping at 1.1877 in afternoon trade, and up from 1.1825 lows seen during the London morning session. Despite the uptick in Treasury yields, the Dollar overall remained under pressure due to the unwinding of safe-haven flows from earlier in the week.
GBP-USD was up over 0.5% in the biggest single-day rally in almost three weeks, posting a three-day high at 1.3889. Despite new COVID-19 cases, the UK government is still planning for a full reopening on July 19.
USD-JPY recovered some of Thursday’s sharp losses into the weekend, with the pairing driven higher by short-covering due to a surge in risk-taking. After opening near 109.90, USD-JPY topped at 110.26, then settled back to near 110.20. The pair is headed for its largest weekly decline since April.
USD-CAD dipped to intraday lows of 1.2471 from 1.2495 in the aftermath of the Canada jobs report, though quickly bounced to near 1.2500. While the overall increase in Canadian payrolls was stronger than expected, it was due entirely to a jump in part-time workers while full-time employment declined. Oil prices will be a key driver of the pair going forward.
