Euro gains on broad dollar weakness, yuan jumps

The euro gained on Friday as the dollar was weighed down by doubts over U.S. economic recovery. This came after U.S. jobs data were reported to be weaker than expected, while the yuan rose to a seven-month peak as investors focused on China’s growth.

Euro investors are awaiting the euro zone’s purchasing managers index due later today, which will show how the region is faring with restriction measures eased.

A bigger-than-expected rise in weekly U.S. unemployment claims and the Fed’s warning about a recovery in hiring raised doubts about the country’s strength to economically recover from the pandemic.

The euro surged from below $1.12 in July to above $1.19 this week. It was up 0.1% at $1.1867 on Friday after hitting more than a two-year high of $1.1966 earlier this week. 

The dollar index slid to 92.663, on course for its ninth week of declines.

In the U.S. Congress, Democrats and Republicans are still debating on additional stimulus to boost the economy, while the euro zone launched several economic packages that were favored by investors.

Friday’s spotlight is on the offshore yuan, which hit 6.8935, its strongest since Jan. 21. The Chinese currency has recovered all of its losses since the coronavirus began to spread in the city of Wuhan. 

The pound benefited from the dollar’s broad weakness and was up towards $1.3250. It last stood at $1.3238 after climbing 0.2%. It briefly rose to 89.65 pence on the euro.

The dollar lost 0.2% to 105.59 on the Japanese yen.