© Reuters.

By Peter Nurse

Investing.com – The dollar weakened in early European trade Friday, with optimism of a recovery from the Covid-19 pandemic weighing on this safe haven, while the pound weakened on growing Brexit uncertainty.

At 4:05 AM ET (0805 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 90.797, trading near a two-and-a-half year low.

fell 0.2% to 104.03, while the risk-sensitive was up 0.4% at 0.7558.

An advisory panel to the U.S. Food and Drug Administration on Thursday recommended approval of Pfizer (NYSE:)’s Covid-19 vaccine for emergency use, paving the way for vaccinations to get underway in America, potentially as soon as next week.

This comes as Covid-19 cases spike in the U.S., recording daily records for new infections and deaths. The surge has hit business across the country, pushing initial jobless claims to their highest level since September, pointing to the economic damage caused by this surge in cases.

Elsewhere, fell 0.1% to 1.3287, continuing the sharp losses seen overnight after British Prime Minister Boris Johnson said late Thursday there was “a strong possibility” Britain and the European Union would fail to strike a Brexit trade deal.

Sterling has shed just short of 1% so far this week as negotiations between the U.K. and the EU to agree a trade deal over some $1 trillion in annual trade have proved fruitless to date.

“There is currently a stalemate in Brexit-negotiations and it is hard to imagine a deal being struck without an exogenous trigger,” said Nordea’s Andreas Steno Larsen, in a research note.

Additionally, edged 0.1% lower to 1.2129, dropping a touch but remaining not far off the previous week’s 2 1/2-year high of $1.2177.

The European Central Bank also deployed another round of monetary stimulus totaling EUR500 billion ($605 billion) on Thursday as widely expected, in order to help the fight against the second wave of Covid-19 cases hitting the region.

ECB President Christine Lagarde added that the euro’s exchange rate had not been targeted during the central bank’s policy meeting on Thursday. 

“In sum, the ECB did not over-deliver and the new set of measures is not strong enough to outweigh the strong bearish USD dynamics in place,” said ING’s Petr Krpata, in a research note. “There is more upside to EUR/USD. We target 1.25 in 2021, with strong upside risks to 1.30.”

rose 1% to 7.9661, with the lira weakening after Turkey posted another current account deficit, its 11th month in a row, while its 12-month rolling deficit reached $33.8 billion from $30.8 billion in the previous month.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link