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Dollar Stays Firm Against Major Rivals

Dollar Stays Firm Against Major Rivals

The U.S. dollar gained in strength against most major currencies on Friday thanks to its safe-haven status amid concerns over second wave of coronavirus infections and worries about global economic growth.

According to a report from John Hopkins University, the number of coronavirus cases across the globe rose to over 7.5 million, while the death toll neared 421,000. The United States continues with the world’s highest number of confirmed cases followed by Brazil, Russia, India and the U.K.

As worries mount over second case of infections, U.S. Treasury Secretary Steven Mnuchin dismissed a need for a second shutdown even if new cases accelerate.

A report from the University of Michigan showed a continued rebound in U.S. consumer sentiment in the month of June.

The preliminary report showed the consumer sentiment index for June climbed to 78.6 from 72.3 in May and 71.8 in April. Economists had expected the index to rise 75.0.

The dollar index rose to 97.45 around mid afternoon, moving up gradually from around the flat line, and was last seen at 97.11, up nearly 0.4% from previous close.

The greenback appreciated to an 8-day high of 1.2545 against the pound and a 3-day high of 1.1277 against the euro, after falling to 1.2607 and 1.1316, respectively in early deals. The next possible resistance for the greenback is seen around 1.20 against the pound and 1.10 against the euro.

Against the Euro, the dollar firmed up to $1.1214 but came off that level and dropped to $1.1257 subsequently, but still remained firmly in positive, gaining nearly 0.4%. Data from Eurostat showed industrial output in Eurozone decreased 17.1% on a monthly basis in April, following an 11.9% drop in March. Production was expected to decline 20%. This was the largest monthly fall recorded since the start of the series and bigger than the reductions seen during the global financial crisis.

On a yearly basis, industrial production fell by a record 28% in April after easing 13.5% in March. Economists had expected a 29.5% fall.

The Pound Sterling dropped to $1.2474, but later regained some lost ground, recovering to $1.2531. It had closed at $1.2602 on Thursday. According to data released by the Office for National Statistics, the UK economy contracted in April at the fastest pace since the series began in 1997. The data showed the country’s GDP contracted 20.4% in April from March, when it was down 5.8%. GDP was forecast to fall 18.4%. In three months to April, GDP decreased 10.4%, slightly faster than the expected fall of 10%.

Against the Japanese currency, the dollar hit a high of 107.55 yen and later eased to 107.39 yen, still firmly up with a gain of about 0.5% from previous close.

The dollar was a bit weak against the Aussie at 0.6865, after fluctuating between 0.6800 and 0.6912.

The Swiss franc weakened to 0.9520 a dollar, losing ground from 0.9442, while the Loonie firmed up to 1.3584 a dollar, gaining from 1.3629.

The material has been provided by InstaForex Company – www.instaforex.com