NEW YORK (Reuters) – The U.S. dollar eased against the euro on Friday, snapping a four-day winning streak as investors covered some bearish bets against the common currency, but broader concerns about the euro’s outlook kept dollar bears in check.
Against the dollar, the euro was up 0.16% on the day at $1.0793. For the week, the dollar remains about 0.7% higher against the euro, set for its biggest ;;weekly rise in three week.
Even after Friday’s gains, the euro remained short of the high of $1.0846 touched on Thursday on hopes that a European Union meeting on Thursday to build a trillion-euro emergency fund would yield concrete results.
“After four consecutive sessions of lower daily lows, EUR-USD has perked up on the back of pre-weekend short covering,” Ronald Simpson, managing director, global currency analysis at Action Economics, said in a note.
Despite an agreement by EU leaders to fund a recovery from the coronavirus pandemic, delays to an agreement on divisive details of the European Union’s stimulus package has kept investors from turning more bullish on the euro.
(Graphic: Euro under pressure – https://fingfx.thomsonreuters.com/gfx/mkt/jbyprjoqnpe/euro.JPG)
French President Emmanuel Macron said differences continued among EU governments over whether the fund should be transferring grant money, or simply making loans.
“Just as with a second marriage, the euro’s rally turned out to be a triumph of hope over experience,” said Karl Schamotta, Chief Market Strata at Cambridge Global Payments in Toronto.
“European leadership disappointed once again, failing to reach an agreement on a collective rescue package,” he said.
“This means the euro area is likely to lag the United States in the race to recover,” said Schamotta.
The dollar found little support on Thursday from data showing new orders for key U.S.-made capital goods unexpectedly rose in March.
The greenback’s rally this week was aided by a historic collapse in oil prices <LCOc1>, which pushed U.S. crude futures into negative territory for the first time ever. As oil prices stabilized, the dollar’s safe-haven appeal receded.
Currencies of oil-exporting countries looked set to finish the week with losses. For the week, the Norwegian crown <NOK=> was down about 3% and the Mexican peso <MXN=> was down about 6%.
Sterling was 0.14% higher on the day at $1.2359 despite data showing British retail sales fell by the most on record in March as a surge in food buying for the coronavirus lockdown was dwarfed by a plunge in sales of clothing and most other goods.
(Reporting by Saqib Iqbal Ahmed; Editing by Nick Zieminski and Jonathan Oatis)