- October 31, 2020 8:31 PM
Dollar Rides Safe-Haven Momentum, Set for Biggest Weekly Gain Since March
- September 25, 2020 7:01 PM
- Cryptocurrency News
Dollar Rides Safe-Haven Momentum, Set for Biggest Weekly Gain Since March | COSS Exchange
. By Yasin The dollar rose to fresh two-month highs on Friday, and is set to close out the session with its biggest weekly increase since March, underpinned by safe-haven momentum amid weaker-than-expected economic data and ongoing worries about the economic fallout from a lack of further federal stimulus.The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.05%, to 96.60.The Commerce Department reported durable goods orders increased just 0.4% in August from the prior month, missing economists' forecasts of 1.5%. A deeper look into the details from the report, however, were more positive than the headline number suggests, though the pace of orders is unlikely to be sustained, Jefferies (NYSE:JEF) said."Sustaining this momentum beyond Q3, however, will be very difficult. The financing environment is very supportive, but low capacity utilization rates and election uncertainty are likely to weigh on capex, at least in the near-term. Businesses typically ramp up investment when utilization rates are tightening. That's clearly not the case today; capacity utilization is still historically low at 71.4%, which is down 6.4 ppts compared to last year," Jefferies said in a note.Elsewhere, the dollar was also supported by weakness in the euro and the pound as a second wave of Covid-19 infection threatens further lockdowns in the EU and U.K.EUR/USD fell 0.40%, to $1.1625, and GBPUSD fell 0.26%, to $1.2715."The US dollar is proving to be the market's preferred safe-haven currency as Europe is hit by a second wave of the virus. But political risks are likely to limit its appreciation potential," Commerzbank (DE:CBKG) said.Others, however, suggest there is still more upside for the greenback. "We estimate there is some room left for the USD to move higher in the coming weeks as we look for certain retests, measured moves or Fibonacci levels to be reached. The rally in the USD this month is viewed as the start of a stretched short position washout and resolution of oversold momentum conditions," Bank of America (NYSE:BAC) Global Research said.