Things are finally starting to look good for the United States Dollar, as it’s slowly heading towards more weekly gains, standing against multiple currencies and being 0.8% stronger. This means that it’s now heading for its best week ever since early April, as oil prices, otherwise tumbling, weighed on commodity currencies, but also the division over Europe’s emergency fund.
At this very moment, the USD is almost 3% against the Norwegian krone, otherwise an oil-sensitive currency, but also 1% against the euro.
More good weeks could follow for the dollar
“I’m running with a more bearish story for the next two or three weeks,” admitted Imre Speizer, analysts for Westpac FX.
“The economic data is going to be horrible. I’m betting that markets will be shocked by it, even though we know it’s coming and that will cause risk sentiment to fall,” he added.
In contrast to the USD’s progress, the euro managed to fell to a one-month low on Thursday, reaching $1.0756. Also, on Friday it was drifting back, in an attempt to test that level, following the EU’s agreement to build a trillion euro emergency fund, but without providing any additional details.
Tensions are growing in Europe
Considering that both Italy and Spain were hit hard by the coronavirus, while Germany managed the crisis better, it wasn’t a big surprise to see older enmities surfacing across a block that could face a cut to an output of 15%, according to a report from the European Central Bank.
“We have no idea how it will be funded and this is not the panacea to stop an impending 15% contraction in GDP,” revealed Chris Weston, head of research at Pepperstone.
Last time, the euro was standing at $1.0776, while the GBP was at $1.2352, down about 1.1% for the week.
Investors aren’t expecting big changes for the end of the day, despite the preliminary goods-orders data in the US or the German business sentiment and the overall increasing global recovery.