NEW YORK: The dollar was up slightly on Friday but on track for its biggest monthly drop in a decade as concerns that an increase in US coronavirus cases will slow the rebound in the economic recovery. Confidence in the dollar was undermined further after US President Donald Trump on Thursday raised the possibility of delaying the Nov. 3 presidential election.
The dollar mostly held gains after data on Friday showed US inflation-adjusted consumer spending has pulled out of April's deep hole but remains below its pre-pandemic level. On Thursday, advance gross domestic product (GDP) data showed contraction of an annualised 32.9% in the second quarter, the quickest pace since the Great Depression.
The dollar index slid as low as 92.539 earlier, the lowest since May 2018, but has recovered to trade up 0.32% at 93.039. It has fallen more than 4% in July, which would be the biggest monthly drop since September 2010, with most of the drop coming in the last 10 days as new cases of coronavirus surged across several US states and some recent data pointed to an economic recovery losing steam.
The euro was at $1.1833, down 0.11% on the day. The currency was little moved by data showing the euro zone economy recorded its deepest contraction on record in the second quarter while the bloc's inflation unexpectedly ticked up in July.
The euro traded below $1.10 as recently as May, but after European Union leaders agreed this month to a 750 billion euro economic recovery fund - while also taking on debt jointly in a major boost to regional cooperation - many investors have warmed to the currency again. Against the yen, the dollar earlier hit a 4-1/2-month low but last stood at 105.71, up 0.95%. The British pound surged to $1.3156, up 0.48% on the day.