Dollar interrupted 4-day rally, but prospects are optimistic

US, WASHINGTON (ORDO NEWS) — The dollar interrupted a four-day rally on Friday, but the outlook for the US currency still looks optimistic amid concerns about the forecast for the euro.

The dollar may still show maximum weekly growth since early April after the results of the EU summit, which discussed the creation of an emergency fund to support economic recovery, disappointed investors.

EU leaders on Thursday agreed to create an emergency fund, the size of which could exceed a trillion euros, to help recover from the coronavirus pandemic, but left controversial details until the summer.

“They met only basic expectations and couldn’t surprise the markets in a positive way, and this puts pressure on the euro,” said Ilan Solot, foreign exchange market strategist at Brown Brothers Harriman in London, speaking about the meeting of EU representatives on the eve.

The euro rose 0.26% to $ 1.0804 by 15.24 UTC, showing a 0.4% decline at the start of the session to a one-month low of $ 1.07275.

Against the yen, the euro also strengthened by 0.26% to 116.24, previously falling to a three-year low of 115.55 yen.

The dollar rally this week was supported by a historic collapse in oil prices, as for the first time in history, US light oil futures went into negative territory. As oil stabilized, the attractiveness of the dollar as a safe haven currency somewhat declined.

“Australian” and “kiwi” traded without distinct dynamics: the New Zealand dollar – at $ 0.6001, and the Australian dollar – at $ 0.6377.

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