The dollar traded lower in early European trade Friday, heading for a weekly loss as concerns eased over Federal Reserve members discussing potentially tapering back bond buying.
At 3 AM ET (0800 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 89.737, down about 0.6% for the week so far.
EUR/USD traded 0.1% higher at 1.2237, not far below the four-month high of 1.2245 it hit earlier in the week, USD/JPY was 0.1% lower at 108.71, while the risk-sensitive AUD/USD was down 0.2% at 0.7756.
The dollar has given back a bounce it made after a mention of possible future tapering discussions, in minutes from the Fed’s April meeting, prompted fears of early rate rises.
Oil prices nudged up on Friday, recovering from three days of losses as investors braced for the return of Iranian crude supplies after officials said Iran and world powers made progress on talks to revive a 2015 nuclear deal.
Brent crude futures for July rose 8 cents, or 0.1%, to $65.19 a barrel by 0646 GMT, while U.S. West Texas Intermediate for July was at $62.16 a barrel, up 22 cents, or 0.4%.
For the week, however, both contracts are down nearly 5% and on track to post their biggest weekly loss since March after Iran’s president said the United States was ready to lift sanctions on his country’s oil, banking and shipping sectors.
Iran and world powers have been in talks since April on reviving the deal and the European Union official leading the discussions said on Wednesday he was confident a deal would be reached.
“Significant progress appears to have been made in the ongoing nuclear negotiations in Vienna and around 1 million barrels per day of additional Iranian barrels looks set to potentially hit the market in the back half of this year,” RBC Capital Markets’ Helima Croft wrote in a note.
European stock markets are seen opening largely higher Friday, continuing the strong gains from the previous session as optimism over the region’s outlook strengthens as it gradually gets to grips with the Covid-19 pandemic.
the 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.2% higher, the FTSE 100 futures contract in the U.K. rose 0.1%, while CAC 40 futures in France dropped 0.2%.
The major European indices closed sharply higher Thursday–with the DAX climbing 1.7%, the CAC 40 gaining 1.3% and the FTSE 100 1%–as investor appetite for riskier assets returned.
Credit Suisse (SIX:CSGN) upgraded its investment stance on continental European equities to ‘overweight’ on Thursday, citing a catch-up in economic recovery, valuations and excess liquidity.
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