LONDON: The dollar edged slightly higher on Friday after three straight days of losses, and riskier currencies fell, as bleak economic data gave global equity markets reason to pause after another week of record highs.
The dollar had fallen against a basket of currencies for the past three sessions as market optimism about US President Joe Biden’s fiscal stimulus plans prompted traders to seek riskier assets, producing gains in riskier currencies such as the New Zealand and Australian dollar.
But that trend paused on Friday as market sentiment pulled back, global shares slipped off record highs and the US dollar steadied, up less than 0.1% on the day at 90.147 at 1206 GMT.
The dollar index was still on track for its biggest weekly loss since mid-December.
“The dollar’s generally stronger because the S&P made a new high yesterday and then paused, and Asian equity markets were all lower,” said Kit Juckes, head of FX strategy at Societe Generale. The Australian dollar fell after disappointing retail sales data, but was still set for a weekly rise. At 1214 GMT, it was down 0.7% on the day at 0.7711.
The New Zealand dollar was down around 0.6% at 0.7178 versus the US dollar.
Gloomy economic data did little to brighten the mood, as UK data showed British retailers struggled to recover in December.
Economic activity in the euro zone shrank markedly in January as stringent lockdowns to contain the coronavirus pandemic hit the bloc’s dominant service industry hard.
At 1219 GMT, the euro was flat on the day against the dollar, at $1.2172.
The euro appreciated somewhat on Thursday after the European Central Bank’s policy rate announcement, as the bank said it may not need to use its full asset-purchase envelope.
The Norwegian crown was hurt by lower commodity prices, down more than 1% against the euro at 10.3275.