The dollar is on track to achieve its best weekly gains in about a month as of Friday, July 16, supported by a shift among investors toward safety amid the rising pace of COVID-19 infections overshadowing the pandemic recovery. A significant inflation reading has also strengthened the New Zealand dollar.
The New Zealand dollar experienced the most notable movement among major currencies during Asian trading, rising 0.6% to $0.7020 after consumer prices surged much faster than expected, bringing the anticipated timeline for interest rate hikes forward to August.
The dollar index, which measures the performance of the U.S. currency against a basket of other currencies, held steady at 92.562 today, reflecting a 0.5% weekly increase. If this trend continues, it would mark the largest weekly percentage gain since the week ending June 20.
The yen, considered a safe haven, also rose as the dollar lost 0.1% against it, making it the second-best performing major currency after the New Zealand dollar. The yen is headed for its best weekly performance against the euro in a month, trading at 109.99 against the dollar and 129.88 against the euro.
The euro remained stable at $1.1808, not far from its three-month low of $1.1772 hit earlier in the week. The British pound traded at $1.3835 in Asia, having given up some of the gains supported by strong job numbers and comments leaning toward tightening from Michael Saunders, a policymaker at the Bank of England.
The Australian dollar rose 0.2% today to $0.7435, but is still trending toward a weekly loss, having dropped to a five-month low against the New Zealand dollar amid changing interest rate expectations in New Zealand.
