Dollar pokes higher as US soft data sours mood; China GDP in focus

SINGAPORE: The dollar held late-week gains on Monday as softening US economic data and rising coronavirus cases turned investors cautious.

Against a basket of currencies the dollar hovered around a one-month high of 90.887 hit in early trade and the mood also supported the safe-haven yen against other majors.

The euro eased slightly to touch a six-week low of $1.2066 and the risk-sensitive Australian dollar slipped 0.3% to a one-week low of $0.7679.

Trade was choppy and moves modest ahead of of a raft of Chinese economic data, including GDP numbers due mid-morning, with fourth quarter GDP expected to show a further pickup in growth to 6.1% year-on-year.

The safety bid has added to support for the dollar since the Democrats won control of US Congress a fortnight ago, which triggered a surge in US yields as investors priced in fewer fetters on a borrow-and-spend administration.

The dollar index is up about 1.9% since then and the euro, which surged in 2020, has slipped more than 2% as the dollar's bounce has coincided with surging virus cases and a political crisis in Italy that have cast doubt on the region's recovery.

Sterling on Monday sat at a one-week low of $1.3567 and the yen was steady at 103.83 per dollar, although it advanced to a three-week high of 125.29 per euro.

The New Zealand dollar eased 0.1% to a three-week low of $0.7117.

"Optimism is being challenged as the reality of a tough few months is upon us," ANZ analysts wrote in a note to clients. "The near-term outlook for consumption, the main driver of economic growth, is poor."

US retail sales fell for a third straight month in December, data showed on Friday, as renewed measures to slow the spread of COVID-19 triggered job losses.

The worldwide coronavirus death toll surpassed 2 million on Friday and the World Health Organization has warned the worst could be ahead.

Later in the week, US President-elect Joe Biden is due to be inaugurated in a heavily-guarded Washington against the risk of more mob violence, with investors also beginning to doubt how much of his stimulus plans can make it through Congress.

Biden's pick for Treasury Secretary, Janet Yellen, is expected to rule out seeking a weaker dollar when testifying on Capital Hill on Tuesday, the Wall Street Journal reported.