U.S. dollar rallied against Yen, Sterling and Swiss franc

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Wibest – USD Dollar: US dollar bills

The U.S. dollar held onto gains against most currencies on Friday. Traders are worrying that a surge in the coronavirus is starting to curb economic activity. Negative sentiment drew safe-haven flows into the U.S. currency.

The euro also soared due to the hopes that European officials will agree on fiscal stimulus measures at a new meeting starting later on Friday.

Meanwhile, the Chinese yuan tumbled down by its most in three weeks as diplomatic frictions steadily increase between the United States and China.

Some traders noted that they are beginning to see troubling signs in recent data that a recent rise in coronavirus infections is threatening the U.S. economy. Others stated that deteriorating U.S.-China ties is a reason to avoid riskier trades. That should keep the dollar in demand for the time being.

Minori Uchida, the head of global market research at MUFG Bank, declared that the greenback looks like an excellent safe haven now because of concerns about a return to coronavirus lockdowns. However, the dollar may start to lose this status if long-term treasury yields continue to fall.

On Friday, the greenback traded at 107.22 yen, after gaining 0.3% in the previous session. The dollar changed hands at 0.9451 Swiss francs, close to the highest since July 3.

For the week, the U.S. currency was on course for gains against the Japanese yen, the Swiss franc, and the sterling due to safe-haven inflows.

How did European currencies fare?

The euro was steady at $1.1386 on Friday. It rose marginally against the British pound at 90.62 pence. The Sterling was also little changed at $1.2569.

On the other hand, the Chinese yuan lowered to 7.0006 to the dollar. Over the week, the United States has increased the pressure on China in a wide-ranging dispute over civil liberties, territorial claims, and access to technology. Some analysts liken it to a new Cold War.

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