NEW YORK- The US dollar softened slightly along with the Japanese yen and the Swiss franc, as risk appetite recovered, with the rally in US Treasuries running out of steam and global stock markets steadying.
The dollar index slid 0.114 percent to 92.259, just a few pips from where it ended the previous week, with the greenback in a holding pattern as traders assess new concerns about the pace of the global economic recovery from COVID-19 in the face of fast-spreading variants.
The slight dip in the greenback was likely profit-taking ahead of some key US data next week, including retail sales and inflation numbers for June, said Joe Manimbo, senior market analyst at Western Union Business Solutions.
“Dollar bulls are just pulling some chips off the table,” he said.
Data on Thursday showed the number of Americans filing new claims for unemployment benefits rose unexpectedly last week, an indication that the labor market recovery from the COVID-19 pandemic continues to be choppy.
The Japanese yen and the Swiss franc, perceived as safe-haven currencies, declined as a downward spiral in US Treasury yields ran out of steam and risk appetite began to recover.
Wall Street followed European stocks higher to erase some of the losses triggered by growth worries earlier in the week.
“Yesterday’s decline in dollar-yen is reversing together with risk appetite in equities suggesting no wider spillover effects across markets for now – the same move is seen in the US 10-year yield bouncing back above 1.3 percent,” said Steen Jakobsen, chief investment officer at Saxo Bank.
