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Dollar Loses Ground Against Peers

The U.S. dollar was weak against almost all major currencies on Friday as surging coronavirus cases across the U.S. raised prospects for further monetary easing from the Federal Reserve sometime soon.

The Euro’s climb to a near four-month high against the greenback as the two-day European Union Summit got underway, contributed as well to the currency’s weakness.

In U.S. economic news, a report from the University of Michigan showed an unexpected deterioration in U.S. consumer sentiment in the month of July. The preliminary report said the consumer sentiment index tumbled to 73.2 in July after jumping to 78.1 in June. The pullback surprised economists, who had expected the index to inch up to 79.0.

Meanwhile, data from the Commerce Department showed U.S. housing starts spiked by 17.3% in June after jumping by 8.2% a month earlier. Economists had expected housing starts to soar by 20%. The report also said building permits increased by 2.1% in June, against expectations for a 5.7% jump.

In virus news, daily coronavirus cases in the United States broke record for the third consecutive day, with the number of infections crossing 70,000 for the first time.

As per Johns Hopkins University’s latest data, total infections in the country reached 3,576,430 after reporting nearly 77,000 additional cases in the last 24 hours.

A surge of coronavirus cases in Florida, South Carolina and Texas led these states to report their highest one-day spikes.

The dollar index slipped to 95.90 and was last seen at 95.95, down 0.41%

Against the Euro, the dollar weakened to $1.1446 before edging up to $1.1430, but was still down by about 0.4%. EU leaders are set to hammer out details of a 750-billion-euro recovery fund today. They also need to agree on a seven-year budget worth another ?1.07 trillion.

German Chancellor Angela Merkel said earlier today that the differences are very very big and she cannot say if there will be a solution this time. French President Emmanuel Macron said it was a “moment of truth” for Europe and the next hours would be decisive.

Meanwhile, data from Eurostat said Eurozone inflation rose to 0.3% from a near-four year low of 0.1% logged in May.

The Pound Sterling was stronger at $1.2566, gaining from $1.251, while the Yen was stronger at 107.23 a dollar, compared with 107.27 yen a dollar on Thursday.

Against the Aussie, the dollar slipped to 0.6996, losing 0.36% from its previous close of $0.6971. The Loonie was down marginally at 1.3583 a dollar, as against 1.3574, while the Swiss Franc was stronger by as much as 0.7% at CHF 0.9389, firming up from CHF 0.9456 a dollar yesterday evening.

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