SINGAPORE, Oct 2 — The US dollar drifted toward posting its softest week in more than a month today, as revived hopes for a new US stimulus package to boost the world's biggest economy had investors seeking out riskier currencies.
Against a basket of six majors, the dollar held near a one-month low in Asia and has slipped 0.9 per cent this week, its largest weekly loss since late August.
The New Zealand dollar made a fresh one-week peak of US$0.6659, while the euro and Aussie held just below week highs made overnight.
Moves in morning trade were small, however, with signs of an impasse on Capitol Hill and the risk of disappointment at US jobs data due later in the day holding investors back.
US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed yesterday to bridge what Pelosi described as differences over dollars and values.
Analysts view their talks as a last-gasp effort to secure relief ahead of the Nov. 3 election for tens of millions of Americans and business including U.S. airlines, which have begun furloughing over 32,000 workers.
“Markets surely remain susceptible to the lack of a deal this side of the election,” said National Australia Bank's head of foreign exchange strategy, Ray Attrill.
The risk-sensitive Australian dollar was last steady at US$0.7182 after climbing as high as US$0.7209 overnight. It has so far posted a weekly gain of 2.2 per cent, its best since late August.
The Japanese yen on the other hand, a safe-haven currency that tends to gain during periods of uncertainty, barely moved this week, suggesting a degree of caution remains. The yen last traded at 105.55 per US dollar.
Sterling had a bumpy overnight session, bouncing around on conflicting Brexit headlines before ultimately sinking as the European Union began legal proceedings over a British plan to undercut their divorce deal.
The pound recovered from a low of US$1.2819 to steady at US$1.2884 in Asian trade. The euro held at US$1.1744.
The Chinese yuan hovered just shy of a 16-month high it made in offshore trade yesterday. Volumes were thinned by holidays in China that have markets closed until Oct. 9.
Investors are watching with concern as coronavirus infection rates climb in Europe and the US and awaiting crucial US labour figures for a read on the economic recovery.
Madrid will become the first European capital to go back into lockdown in coming days to fight a steep surge in cases. A record increase in new cases in Wisconsin yesterday, fanned fears of hospitals there being overwhelmed.
US non-farm payrolls likely increased by 850,000 jobs in September, according to a Reuters survey of economists. That would leave employment 10.7 million below its level in February. Data is due at 1230 GMT. — Reuters
