 "Dollar")
By Saikat Chatterjee
LONDON (Reuters) - The U.S. dollar slipped against its rivals on Monday in a bout of profit-taking after registering its biggest weekly rise in more than two months last week fuelled by concerns over the outlook for global growth.
The primary source for investor concern is the global prominence of the Delta coronavirus variant which is set to weigh on European manufacturing survey data due shortly.
Keeping in line with the softening trend in Chinese and U.S. PMIs, European PMI data is expected to show the strong recovery seen over the June quarter is now in danger of fading as a combination of rising prices, ongoing supply chain strains and labour shortages take their toll on business activity.
And while the rise in the delta variant is likely to boost the safe-haven appeal of the dollar, it might also derail the Fed's plans to taper its pandemic-era stimulus plan by the end of the year, according to some analysts.
Fed Chair Jerome Powell, who has thus far mostly played down the repercussions, will speak about the economic outlook at the central bank's Jackson Hole Aug.26-28 conference, which will be carefully parsed by traders eager for details of the timing and pace of monetary policy tightening.
"Risk off is set to keep the dollar underpinned and while a cautious Fed should diminish the extent of dollar gains, some adjustment in our year-end FX forecasts to show less dollar depreciation will be required given COVID risks have picked up," MUFG strategists said in a note.
The dollar index, measuring its performance against main rivals, edged 0.1% lower at 93.638 but was within striking distance of an early November high of 93.734 hit on Friday.
The index climbed nearly 1% last week, despite comments by Dallas Federal Reserve President Robert Kaplan, a well-known hawk, who said on Friday he might reconsider the need for an early start to tapering if the virus harms the economy.
The Australian dollar led gainers against the U.S. currency after Prime Minister Scott Morrison said Australians must start to learn to live with COVID-19 when higher vaccination targets are reached.
The New Zealand dollar was flat at $0.68385, close to the 9 1/2-month low of $0.6807 reached Friday, with the nation under lockdown as it struggles to contain a Delta outbreak.
The euro strengthened 0.1% to $1.1711, off Friday's 9 1/2-month trough of $1.1664.
In cryptocurrencies, bitcoin topped $50,000 for the first time since mid-May, and last traded 2.06% higher at $50,333.24.
(Reporting by Saikat Chatterjee; Editing by Tomasz Janowski)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
