The dollar pushed higher in early European trade Friday with the safe haven benefiting from investors becoming more risk averse on concerns of the global economic recovery as Covid-19 cases surge again.
The Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 92.505, just shy of Wednesday’s three-month high at 92.844.
Concerns have been growing that the fast-spreading delta variant of the Covid-19 virus.
These worries resulted in the benchmark 10-year U.S. Treasury yield falling to its lowest in nearly five months at 1.25% late Thursday, pressuring the dollar, but has since rebounded to 1.34%. It was as high as 1.54% just two weeks ago.
San Francisco Federal Reserve President Mary Daly told the Financial Times in an interview published on Friday that: “One of the biggest risks to our global growth going forward is that we prematurely declare victory on Covid.”
“If the global economy . . . can’t get . . . higher rates of vaccination, really get Covid behind [us], then that’s a headwind on U.S. growth,” Daly added.
GBP/USD fell 0.1% to 1.3768 after the U.K. economy grew less than expected in May, with the country’s flash GDP estimate showing an expansion of 0.8%, a slowdown from the growth of 2% the month before, which was revised down.
USD/CNY fell 0.1% to 6.4881, after China’s consumer price index grew a smaller-than-expected 1.1% year-on-year in June, while contracting a bigger-than-expected 0.4% month-on-month. Meanwhile, the producer price index grew 8.8% year-on-year, remaining uncomfortably high as Beijing tries to bolster a post-coronavirus revival.