Dollar set for biggest weekly drop in a month before U.S. data

The U.S. dollar slipped to a one-week low against its rivals on Thursday as upbeat U.S. and European economic data sharpened risk appetite, with hopes for a COVID-19 vaccine breakthrough also helping sentiment.

Against a basket of currencies, the greenback is on track for its biggest weekly drop in a month, of 0.5% with the rise in coronavirus cases in the U.S. weighing on sentiment.

Data due at 1230 GMT is expected to show non-farm payrolls figures increased by 3 million jobs last month before a long holiday weekend. U.S. markets are shut on Friday.

A larger than expected gain could help the dollar regain some ground. Estimates vary widely amid concerns about whether the U.S. economy can sustain its recovery as coronavirus infections surge and some states reimpose limits on business and personal activity.

Despite the dollar’s recent spell of weakness, the greenback is still up 2.5% from the 2020 low of 94.6 it hit in early March. A Reuters poll predicts more weakness for the greenback over the next 12 months due to weak global demand.

Supporting sentiment in the meantime was news that a COVID-19 vaccine developed by German biotech firm BioNTech and U.S. pharmaceutical giant Pfizer had shown potential in early-stage human trials. U.S. manufacturing activity also rebounded more than expected in June, with the Institute for Supply Management’s manufacturing activity index hitting its highest in 14 months.

Dollar set for biggest weekly drop in a month before U.S. data, Reuters, Jul 2