Dollar in Doldrums as Euro Eyes Weekly Gain
Investing.com - The dollar fell against its rivals Friday, pressured by weak U.S. economic data and a bounce in the euro and yen.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.31% to 96.158.
The University of Michigan said its consumer sentiment index in August fell to 95.3, down from 97.9 in July. That was the lowest level in 11 months and did little to encourage traders to back the dollar.
The greenback was also pressured by uptick in safe-haven yen, as fears of contagion resumed after the lira turned bearish, falling about 5%.
USD/JPY fell 0.45% to Y110.41.
Fresh selling emerged in the USD/TRY as market participants were not impressed by Turkey's central bank efforts to limit foreign investors from betting against its embattled domestic currency. Turkey took measures to limit the amount of currency-swap transactions, a movethat analysts said would curb foreign investment flows into the country as it limits investors' ability to offset the risk of plummeting lira.
"By taking this step, the government is cutting off the branch the Turkish economy is currently sitting on," Commerzbank (DE:CBKG) analysts said in a note. "It removes the ability of foreigners to hedge against Turkish lira weakness. Who is going to buy Turkish stocks, bonds, etc., if there is no opportunity to hedge the currency risk?"
Yet bargain hunters appeared to shrug off fresh selling in the lira and scooped up a cheaper euro as it rose 0.28% against the dollar to $1.1410. The single currency was set to post its first weekly gain in four weeks.
There was no such reprieve for the pound, however, as it remained on track for a sixth-straight weekly loss despite rising 0.10% to $1.2728. Brexit-related angst has pushed the pound to its lowest level in nearly 14 months.
USD/CAD plunged 0.56% to C$1.3087 as bullish inflation data from Canada fueled speculation about a further tightening of monetary policy from the Bank of Canada.
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