By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — The U.S. dollar weakened on Friday as investors showed a growing appetite for stocks, reducing the safe-haven appeal of the greenback.
The ICE dollar index DXY -0.52% , which measures the U.S. currency against a basket of six major rivals, fell to 80.518 on Friday from 80.704 in North American trade on Thursday.
“It’s a softer dollar environment, because you’ve seen equities in general up five days in a row, and it’s a positive risk environment. Within that space, the euro has done better than most,” said Simon Smith, chief economist at FxPro.
Asian and European stocks largely continued to move higher on Friday, following on from prior-day gains inspired by encouraging Chinese manufacturing data.
Wall Street opened higher as traders returned to action in a shortened day of trading. The Dow Jones Industrial Average DJIA +0.88% is so far looking at a weekly gain of 2.5%, while the Standard & Poor’s 500 index SPX +0.86% is set to gain 2.8% for the week.
The euro EURUSD +0.61% last changed hands at $1.2929, a rise of 0.4% and nearing three-week highs. Also underpinning those gains was an upbeat business sentiment index out of Germany. The Ifo index rose to 101.4 in November from 100 in October.
“Companies expressed slightly greater satisfaction with their current business situation,” said Hans-Werner Sinn, president of the Ifo Institute. “They were also far less pessimistic about future business developments. The German economy is holding up in the face of the euro crisis.”
Against the yen EURJPY +0.48% , the euro fetched ÂĄ106.18. A day earlier, the euro hit ÂĄ106.57, its strongest level versus the Japanese currency since April 26. The yen weakened in the face of the upbeat Chinese data.
The dollar pulled back some against the Japanese yen, with the USDJPY -0.12% trading at ÂĄ82.43 compared to ÂĄ82.55 on Wednesday.
Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.
