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FOREX-Dollar edges lower but stimulus uncertainty keeps euro gains capped

Published 04/25/2020, 02:49 AM
Updated 04/25/2020, 02:50 AM
© Reuters.
USD/MXN
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USD/NOK
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LCO
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* Euro up 0.16%; dollar up 0.7% for the week
* Sterling modestly higher despite dismal retail sales data

(Updates to U.S. afternoon)
By Saqib Iqbal Ahmed
NEW YORK, April 24 (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.

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.
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Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
Graphic: Euro under pressure https://tmsnrt.rs/3bCq6CG
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