The euro was in focus ahead of data on German business sentiment due
later in the day, but the outlook for the common European currency has
soured due to renewed coronavirus lockdowns and the slow pace of
vaccinations across the European Union.
The greenback has more room to rise against the euro, but its gains
against other currencies in the past few weeks have been so rapid that
some analysts are warning against chasing the dollar higher from current
levels.
“The euro has broken through the 200-day moving average, and that is a
clear sign that it will continue to go lower,” said Minori Uchida, head
of global markets research at MUFG Bank in Tokyo.
“The yen is getting strong on some of the crosses, which will cap
dollar/yen. Yields have supported the dollar, but this move could start
to run out of steam.”
Against the euro, the dollar was quoted at $1.1776, close to its strongest since November last year.
The dollar bought 109.21 yen, which is near its highest since June.
The greenback traded at 0.9396 Swiss franc, holding onto a 0.5% gain from the previous session.
One notable exception to the dollar's gains was the British pound,
which edged up to $1.3747 after rising 0.4% on Thursday. Data due later
on Friday that is forecast to show a rebound in British retail sales
could give the pound a further boost.
U.S. jobless claims fell to a one-year low last week and President Joe
Biden said he will double his vaccination rollout plan after reaching
his previous goal of 100 million shots 42 days ahead of schedule, both
of which support optimism in the dollar.
The dollar index against a basket of six major currencies stood at 92.788, close to a four-month high.
Traders will look to data on U.S. personal consumption due later on
Friday for further hints about the strength of the U.S. economy.
During European trading Germany's Ifo survey is expected to show an
improvement in business morale. But this is unlikely to halt the euro's
slide, because worries about the European Union's slow vaccination
rollout and bickering with former member Britain over vaccine exports
have become a dominant theme, traders said.
