NEW YORK, Feb 2 — The US dollar reached a six-week high yesterday on weakness in the euro, Swiss franc and Japanese yen amid views that the United States has an advantage in growing its economy and vaccinating its population against Covid-19.
The dollar index was up 0.37 per cent to 90.955 in late afternoon trading in New York, just off of levels last seen on December 21.
The Japanese yen weakened, hovering around 105 to the US dollar, a level not seen since mid-November.
The euro was off 0.57 per cent to US$1.2069 (RM4.89). Against the Swiss franc the dollar was up 0.66 per cent to 0.8967 to the dollar, its weakest level in two months.
The moves came on evidence pointing toward a stronger recovery from the coronavirus pandemic for the United States than for other countries.
The euro weakened after Germany reported that retail sales plunged by an unexpected 9.6 per cent in December after tighter lockdowns last year to curb the spread of Covid-19 choked consumer spending in Europe’s largest economy.
The dollar may be more resilient in the near-term because “both growth and vaccination favour the US,” said Kamal Sharma, director of G10 FX strategy at BofA Merrill Lynch Global Research.
The dollar’s gains yesterday came as crude oil and silver, both dollar-denominated commodities, rose 2 per cent and 7 per cent, respectively.
Oil was buoyed by falling US crude inventories and rising fuel demand as one of the worst snowstorms in years hit the US Northeast.
Silver prices popped on speculation that retail traders were encouraging one another to buy the metal after their orders last week drove up shares of video game retailer GameStock Corp
US-based strategists at Wells Fargo Securities wrote, “We think USD strength still has room to run.” That’s especially true against more volatile securities, they added.
Mexico’s peso also benefited from the rise in oil and silver, gaining more than 1 per cent. Besides being an oil producer, Mexico was the world’s largest silver producer in 2019, according to data from Statista. — Reuters
Source: Malay Mail
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