Dollar holds as risk aversion hits Canadian dollar and Aussie

TOKYO, Aug.20 (Reuters) – The safe haven US dollar hovered near a 9.5-month high against its major peers on Friday on Friday, supported by fears that the Delta coronavirus variant could delay economic recovery global.

The greenback was also boosted by expectations that the Federal Reserve could start cutting stimulus again this year, even with a rise in COVID-19 infections this month in the United States.

The dollar index, which measures the currency against six rivals, was little changed at 93.544 from Thursday, when it touched 93.587 for the first time since early November. For the week, it is on track to gain 1.1%, the most in two months.

The Canadian dollar fell to a new six-month low of C $ 1.2832 amid falling oil prices over concerns about economic growth, while the Australian and New Zealand dollars languished near. from their nine-month lows.

“Risk aversion in the air has supported the greenback, with growth-friendly currencies bearing the brunt,” Rodrigo Catril, strategist at National Australia Bank, wrote in a client note.

The yen, another safe haven currency, slipped 0.1% to 109.87 per dollar on Friday, but remains at the center of its last six-week trading range.

The euro rose 0.05% to $ 1.6825, but still traded near the 9-1 / 2-month low of $ 1.16655 reached overnight. It is down 0.94% this week, the highest since mid-June.

The Fed’s July meeting minutes, released on Wednesday, showed officials broadly expect to reduce their monthly bond purchases later this year, though divisions remain on schedule and pace. ‘a decrease, and whether inflation, unemployment or the coronavirus pandemic pose a greater risk. to economic recovery. Read more

A drop in Fed debt purchases is widely seen as positive for the dollar as it should raise yields on U.S. government bonds, making it more attractive for investors to hold dollar-denominated assets.

The Aussie rose 0.1% to $ 0.7155 on Friday, but was still close to the 9-1 / 2-month low of $ 0.7143 reached on Thursday. It fell 3% this week, on track for its worst performance since September last year, with most of the country on lockdown to fight a COVID-19 outbreak.

The New Zealand kiwifruit rose 0.1% to $ 0.6832, but remained near Thursday’s nine-month low at $ 0.6810. It fell 2.9% for the week, also the worst since September, after its central bank delayed a rate hike, shifting gears as the country entered an instant COVID-19 lockdown.

The British pound hit a new one-month low of $ 1.3628 on Friday, before trading up 0.07% to $ 1.3638. It fell 1.64% this week, which would be the biggest drop in two months.

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Reporting by Kevin Buckland; Editing by Ana Nicolaci da Costa

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