Dollar Set for Weekly Loss as Taper Jitters Subside

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LONDON, May 21 Reuters The dollar hit its lowest level in four months on Friday and was set to notch a modest weekly drop as traders concerns about taper talk in Federal Reserve minutes faded, though a pullback in commodity prices and nervousness about virus outbreaks kept losses in check.

The dollar has given back a bounce it made after a mention in minutes from the Feds April meeting of possible future discussions on paring back stimulus, initially viewed as an indication rate rises might come earlier than previously thought.

Investors now figure that any action remains a long way off and that the path might again be clear for a resumption of Aprils downtrend, as the U.S. trade and account deficits weigh.

A loosening of COVID19 restrictions helped surveys of German services activity and French business activity come in better than expected in May, although they didnt appear to have a noticeable effect on the euro.

Against the single currency the dollar was parked at 1.2211, not far above the fourmonth low 1.2245 it hit earlier in the week and close to testing major support around 1.2345.

The dollar index was held below 90 and was last at 89.692. It hit its lowest since January 7.

The index, which measures the greenback against six major currencies, is down about 0.6 for the week so far. Against the Japanese yen the dollar held at 108.74, for a weekly loss of roughly 0.5.

All of the worry around talk of even talking about a taper, that was revealed in the Fed…

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