Dollar resumes losses ahead of key US data

The US dollar fell against a basket of currencies on Friday, to resume losses after it took a breather yesterday within recovery attempts from a 7-week low, to head today for the largest weekly loss since July, as demand slowed due to the progress made in the ongoing political talks about the US second fiscal stimulus package, ahead of the release of key US data, which provide insight about the US economic recovery pace during the fourth quarter.

The dollar index fell 0.3% to 92.68 points, after opening at 92.92 points, and hit an intraday high of 93.12 points.

The greenback gained 0.3% yesterday, posting its first daily gain in 5 days, within recovery attempts from a 7-week low of 92.47 points.

The US dollar has lost more than 1.1% so far this week, to head for the third weekly loss in a month, and the largest loss since mid-July.

The biggest weekly loss in 3 months came due to strong market sentiment, as investors focused on other high-risk currencies, amid hopes the US Congress will pass the new Covid-19 aid package, ahead of the presidential election in November.

US House of Representatives Speaker Nancy Pelosi stated that progress she and Treasury Secretary Steven Mnuchin were "just about there" on reaching the second Covid-19 stimulus deal.

This raised hopes about passing the second fiscal stimulus package in the US Congress before the next presidential elections in November.

Investors are waiting for the release of the US manufacturing PMI reading at 12:30 GMT, with forecast to rise to 53.5 points in October vs. 53.2 points in September, and the service PMI reading is expected to rise to 54.7 points in October vs. 54.6 in September.