By Tom Westbrook
SYDNEY (Reuters) – The dollar headed for its best week against the yen since March on Friday, as COVID-19 vaccine news lured investors out of the Japanese safe haven, though riskier currencies have made little headway as the pandemic worsens in Europe and the United States.
Virus worries helped the yen recoup a little of its losses overnight, lifting it 0.3% against the greenback, but it remains about 1.7% lower for the week, which if sustained would be its sharpest weekly drop since falling 2.4% in the panic of March.
It was steady at 105.05 yen per dollar
“There are reasons to be optimistic about the global economic recovery, and eventual pandemic submission over the coming year, but we are not out woods yet,” said National Australia bank’s senior currency strategist Rodrigo Catril.
“The continues to find the air thinning above 73 cents.”
The euro () rose marginally overnight to clamber back over $1.18, but it is down about 0.6% for the week so far. The () is up 0.7% this week. The
In Europe and the United States, a second wave of infections has prompted the re-imposition of restrictions to stop the virus’ spread. That will have markets discounting any good news in eurozone growth numbers due later on Friday.
“The GDP report will have minimal impact on the euro with analysts, including ourselves, now widely expecting a double‑dip recession in the euro zone starting in the fourth quarter,” said Commonwealth Bank of Australia (OTC:) analyst Kim Mundy in a note.
Central bank chiefs likewise warned that the crisis has some way to run, even with the end now in sight thanks to Pfizer (NYSE:)’s announcement this week that trials have showed the vaccine it developed with Germany’s BioNTech seems to work.
“From a huge river of uncertainty, we see the other side now,” said European Central Bank President Christine Lagarde in a panel discussion with U.S. Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey.
“But I don’t want to be exuberant about this vaccination because there is still uncertainty,” she said, about its production and distribution.
Currency bid prices at 11:25AM in Sydney (0025 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Euro/Dollar () $1.1810 $1.1804 +0.05% +5.34% +1.1810 +1.1803
Euro/Yen () 124.03 124.11 -0.06% +1.71% +124.1400 +124.0300
Tokyo Forex market info from BOJ