Dollar pares intra-day loss as weakness in U.S. stocks dampens risk sentiment

The greenback ended the day largely flat against majority of its peers on Friday as despite intra-day weakness in European morning on return of risk sentiment due to Covid-19 vaccine optimism and as U.S. lawmakers agreed, late on Thursday, to revive discussions on the coronavirus aid package, decline in U.S. stocks dampened risk appetite, the Dow closed down 219 points or -0.75% at 29,263.  
  
CNBC reported, the U.S. Senate Democratic leader Chuck Schumer said that Republican Majority Leader Mitch McConnell had agreed to resume COVID-19 relief talks as cases surge across the country.  
While Reuters reported Dallas Federal Reserve Bank President Robert Kaplan on Friday called again for more fiscal support for the U.S. economy, particularly for state and local governments struggling with budget holes, and for the millions of unemployed who are spending down savings from prior aid.     "If the savings from those do run out you are going to see consumer spending get weaker," Kaplan said at an energy conference held online by the Dallas and Kansas City Fed banks. "This hasn't felt as much like a recession for a lot of businesses - it will start to, if you don't have some renewal in some form of the fiscal relief."  
  
Versus the Japanese yen, dollar retreated to 103.73 in Australia before rebounding to 103.90 in Asian morning. The pair then weakened to 103.75 ahead of European open and traded sideways before falling to session lows of 103.71 in New York morning, price last traded at 103.85 near the close.  
  
The single currency retreated to 1.1866 ahead of Asian open before rising to an intra-day high at 1.1890 in Asia on usd's weakness but only to drop to 1.1852 in European morning due partly to cross-selling of euro especially vs sterling. The pair then staged a rebound to 1.1878 ahead of New York open and then hit session lows of 1.1851 in New York as weakness in U.S. stocks in New York afternoon triggered safe-haven usd buying.  
  
The British pound traded in choppy fashion, price dropped to 1.3246 in Australia before climbing to 1.3287 at European open on the back of upbeat UK retail sales data. Despite retreating to 1.3250 in early European morning on Bloomberg report that main hurdles in Brexit talks remained unsolved, price ratcheted higher to 1.3292 in Europe, then to session highs of 1.3297 in New York morning on cross-buying of sterling especially vs euro due to renewed Brexit optimism. Price last traded at 1.3282 near the close.  
  
Reuters reported the EU and Britain are very close to agreement on most issues as time runs out for a trade deal but they are still at odds over fishing rights, guarantees of fair competition and ways to solve future disputes, an EU official told ambassadors in Brussels.     "We are both close and far away. It seems that we are very close to agreement on most issues but differences on the three contentious issues persist," a senior European Union diplomat said after ambassadors were briefed on Friday by an EU negotiator.  
  
Data to be released this week:  
  
New Zealand retail sales, Australia manufacturing PMI, services PMI, Japan market holiday, France manufacturing PMI, services PMI, Germany manufacturing PMI, services PMI, EU manufacturing PMI, services PMI, UK manufacturing PMI, services PMI, U.S. manufacturing PMI, services PMI and national activity index on Monday.  
  
Australia imports, exports, trade balance, Germany GDP, Ifo business climate, current conditions, expectations, UK distributive trades, U.S. redbook retail sales, monthly home price, consumer confidence and Richmond manufacturing on Tuesday.  
  
Australia construction work done, Swiss investor sentiment, U.S. mortgage applications, building permits, personal income, personal spending, core PCE index, durable goods, GDP, goods trade balance, wholesale inventories, initial jobless claims, continued jobless claims, University of Michigan consumer sentiment, new home sales and FOMC minutes on Wednesday.  
  
New Zealand imports, exports, trade balance, Australia capital expenditure, building capex, Japan leading economic index, coincident index, Germany consumer sentiment, Swiss non-farm payrolls, France consumer confidence, Italy trade balance and U.S. market holiday on Thursday.  
  
Japan Tokyo CPI, France consumer spending, GDP, CPI, producer prices, Italy business confidence, consumer confidence, producer prices, EU business climate, economic sentiment, industrial sentiment, consumer confidence and Canada budget balance on Friday.