Off The Wire
Dollar dips as Trump floats idea of election delay
NEW YORK (Reuters) - The U.S. dollar dipped on Thursday after U.S. President Donald Trump raised the possibility of delaying the nation’s November presidential election, and it is on track for its worst monthly performance in a decade as the spread of the coronavirus continues to weigh on the U.S. economy.
Trump repeated claims of mail-in voter fraud, writing on Twitter “delay the election until people can properly, securely and safely vote???”
The comments reversed an earlier dollar bounce.
“Any form of U.S. uncertainty, whether economics or politics, is an excuse to hit the sell button for the U.S. dollar,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The greenback has been in a month-long nosedive as the continued spread of coronavirus across U.S. states weighs on the economy.
Data on Thursday showed that the U.S. economy contracted by 32.9% in the second quarter, the steepest pace since the Great Depression. In a separate report, the Labor Department said initial claims for unemployment benefits totalled 1.434 million in the week ending July 25.
“Claims are telling us that the recovery is already starting to tire,” said Manimbo.
The dollar index against a basket of currencies was last down 0.02% at 93.34. It is on track for a 4.17% decline this month, which would be the worst monthly performance since September 2010.
The euro set a new 22-month high of $1.1808, before dropping back to $1.1791, up 0.01% on the day.
The single currency was weighed down earlier on Thursday after data showed that the German economy contracted by a worse-than-expected 10.1% in the second quarter, its steepest plunge on record.
Sterling gained 0.43% to $1.13051, its highest since March.
The British currency is likely poised for further strength as it catches up for pervious underperformance, said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. “I think sterling is in the middle of a historic advance.”
Editing by Nick Zieminski