Dollar set for worst week in a month

LONDON – The dollar was headed for its worst week in a month on Friday while the euro gained, as investors bet the US currency has further to fall and that the worst of the Covid-19 pandemic may be over within months.

A flurry of positive vaccine news has helped drive a rally in riskier currencies, while actions taken by the Federal Reserve have weakened the dollar.

The dollar index dropped to a two-and-a-half-year low of 90.504 on Thursday and is on track for a more than 1 percent fall over the week. It edged down 0.1 percent on the day at 90.578.

“It has been another bad week for the US dollar,” analysts at MUFG said in a note. “It will encourage speculators tore build short US dollar positions which have been pared inrecent months.”

Investors have turned short dollars, figuring rates will stay low for a long time in the United States, forcing yield-seekers to head elsewhere for better returns.