Dollar regains traction as weakness in U.S. stocks triggers safe-haven usd buying

Market Review - 09/07/2020  23:42GMT  

Dollar regains traction as weakness in U.S. stocks triggers safe-haven usd buying

The greenback went through a hectic Thursday session as despite initial weakness in Asia and European morning, dollar staged a strong rebound in New York morning on active safe-haven buying due to weakness in U.S. equities and ended higher against majority of its peers. The Dow ended at 25,706, down 361.19 points, or -1.39%.  
  
On the data front, Reuters reported initial claims for state unemployment benefits totaled a seasonally adjusted 1.314 million for the week ended July 4, down from 1.413 million in the prior week, the Labor Department said on Thursday. Economists polled by Reuters had forecast 1.375 million applications in the latest week.  
  
Versus the Japanese yen, although dollar briefly dropped to 107.19 shortly after Asian open, price then rebounded to 107.39 in Europe but only to fall to a 9-day low at 107.11 in New York morning on selloff in U.S. Treasury yields. However, the pair then recovered to 107.35 on safe-haven usd buying due to weakness in U.S. stocks and then moved sideways.  
  
Although the single currency continued yesterday's rally and rose from 1.1328 in Asian morning to a near 4-week high of 1.1371 (EBS), price erased intra-day gains and fell to 1.1317 on cross-selling in euro. However, the pair then rebounded in tandem with sterling to 1.1348 at New York open but only to tumble to session lows at 1.1281 due to renewed usd's strength near the close.  
  
Although the British pound initially retreated from 1.2630 (Reuters) at Asian open to 1.2602, cable found renewed buying and rallied to 1.2652 in European morning due to continued optimism in UK Finance Minister Rishi Sunak's new economic plan. The pair then ratcheted higher to a 22-day high of 1.2669 in New York morning before falling to 1.2600 on active buying in usd and then moved narrowly ahead of the close.  
  
Data to be released on Friday :  
  
New Zealand retail sales, Japan corporate goods price index, France industrial output, Italy industrial output, U.S. PPI, core PPI, and Canada employment change, unemployment rate.