The US dollar slipped as improving risk appetite drew traders away from safe havens, even with the US-Iran conflict keeping positions light into the weekend. The euro, pound and Canadian dollar all firmed against the greenback, while the yen gained on hotter Japanese inflation.
The US dollar struggled to hold its ground on Friday as traders leaned back toward riskier assets, posting modest losses on Thursday and staying under pressure into the new session. With no high-impact US data on the calendar, improving risk appetite weighed on the greenback as gains on Wall Street cut demand for the safe-haven currency.
Traders still held back on large bets. Markets stayed volatile heading into the weekend as investors avoided big positions amid continued uncertainty over the conflict involving Iran and the United States. Early on Friday, US stock index futures traded mixed and the US Dollar Index hovered around 100.75.
Euro and pound extend gains
The euro held its strength against the dollar, with EUR/USD edging toward 1.1450 after German data confirmed the country's annual Consumer Price Index rose 2.3% year-over-year in June. The reading matched the preliminary estimate, offering markets little surprise on the inflation front.
The British pound also pushed higher. GBP/USD traded above 1.3400, reaching its highest level since the middle of June.
Canadian dollar awaits jobs data
The Canadian dollar firmed ahead of the country's June labour market report, the day's only major release with the potential to move sentiment. USD/CAD fell toward 1.4150 during the European session, with markets expecting Canada's unemployment rate to hold steady at 6.6% in June.
Yen gains on hot inflation
The yen caught a bid after data showed Japan's Producer Price Index rose 7.1% year-over-year in June, accelerating from a 6.6% increase in May and beating expectations of 6.8%. Following the print, USD/JPY declined about 0.5% to trade near 161.60.
The Indian rupee extended its recovery as the dollar weakened, with USD/INR falling toward 95.22 amid hopes that renewed Middle East conflict between the United States and Iran would not become prolonged. Still, the rupee could face pressure if elevated oil prices persist.
Source: Invezz
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