© Reuters. FILE PHOTO: A picture illustration shows $ 100 banknotes in Tokyo
By Tom Wilson
LONDON (Reuters) – The dollar held near its highest level since November against most major currencies on Friday, buoyed by hopes of improving US economic data and coronavirus vaccine availability, as the euro moved a day earlier recovered from heavy losses.
Against a basket of six major currencies, the dollar was 92.793, not far from a four-month high the day before and on track to regain 0.9% weekly.
In further signs of strength, the dollar rose against the Japanese yen to 109.44, its highest level since June. Against the Swiss franc it rose to its highest level since July and was able to gain 0.5% compared to the previous meeting.
Unemployment claims in the US fell to an annual low last week, and President Joe Biden said he will double his vaccination schedule after hitting his previous goal of 100 million shots 42 days ahead of schedule. Both support the dollar’s optimism.
U.S. personal consumption data due later on Friday was also found on retailers’ radars.
“The magnitude of the strength (of the dollar) is more likely due to Biden’s stimulus package,” said Derek Halpenny, director of research for global markets at MUFG.
A revival of COVID-19 cases in large economies like the euro zone has also had a positive impact, he added.
The dollar’s gains have been so rapid over the past few weeks that some analysts are warning against chasing the dollar up from current levels.
“We believe recent moves in the currency markets are corrective and not part of a new trend for 2021,” ING analysts wrote in a note.
The euro was able to return from Thursday’s four-month low, with doubts about the slow pace of vaccination plaguing the common currency.
Against the euro, the dollar fell 0.1% to $ 1.17630 but remained close to its strongest level since November.
The German Ifo poll on Friday is expected to show an improvement in business morale.
However, it is unlikely that the euro rate slide will stop. Concern over the slow adoption of vaccination by the European Union and the dispute with former member Britain over vaccine exports has become a dominant issue, traders said.
A notable exception to the dollar’s gains was the pound sterling, which rose 0.3% to $ 1.37735 after rising 0.4% on Thursday.
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