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Dollar recovering slightly over tension fears

David Hobart

dollar and forex numbers

The US dollar exhibited the signs of a small but steady weekly recovery on Thursday and into Friday.

The currency, which like many around the world has experienced various ups and downs relative to the exact moment of the coronavirus pandemic, looks like it will end this week with a gain.

Overall, the currency is up by close to half a percentage point in its index on the week.

The index is a tool that’s designed to help traders make an accurate assessment of the dollar’s performance relative to several others across the globe.

The development came after traders began to fear that the relationship between China and the US could be about to sour even further.

In a broadcast interview on Thursday, US President Donald Trump said that he was thinking about ending his country’s relationship with China.

Trump appeared to fixate on China’s alleged mismanagement of the coronavirus and seemed to accuse it of allowing the virus to spread.

In a characteristic mix of vague and direct language, Trump said in the interview on Fox Business Network that there were several options open to him.

“There are many things we could do. We could do things. We could cut off the whole relationship,” he said.

China, however, claims that it has been open about the developments.

For traders, the main perceived risk is that the argument will affect the early-stage trade deal that was signed out the outset of this year.

The Chinese yuan was down to its worst position in a week at one stage.

Elsewhere around the world, sterling continued to remain down.

It was at its lowest point in five weeks at one stage overnight in its pair against the US dollar, reaching $1.2161.

This came after the government of Prime Minister Boris Johnson said that it had no intention of drawing out the transition deadline for the UK’s departure from the EU.

In Europe, the single currency reached its lowest position in close to five years in its pair against the Swiss franc, which is known for being a so-called safe-haven currency.

The euro was spotted at 1.502 francs at one stage in its pair against the franc.

In its pair against the dollar, meanwhile, it was reported at $1.0840 at one stage overnight.

A significant loser over the course of the week, however, was the Australian dollar.

This currency, which is often perceived by analysts to be particularly sensitive to trade tensions and especially to those pertaining to China, was set to end the week with a loss of around a whole percentage point.

This looked set to reflect its first week-on-week drop since the start of April.

It was, however, firmer as morning trading got underway.

It was spotted at $0.6464 in its pair against the US dollar at one stage.

The New Zealand dollar, meanwhile, went up slightly and crossed the 60 cents benchmark at one point in its pair with its US counterpart.

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David Hobart
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