Dollar drops to 2-year low ahead of key US data

The US dollar fell against a basket of currencies on Friday, to deepen its losses for the sixth straight day, and hit a almost a 2-year low, as the market risk appetite continued to improve, ahead of key data releases on the manufacturing sector, which provide insight on the performance of the world's largest economy.

The dollar index fell 0.2% to the lowest since September 2018 at 94.57 points, after opening at 94.77, and hit an intraday high of 94.83.

The index lost 0.2% yesterday, posting its fifth daily loss, in its longest losing streak since May.

The US dollar has lost more than 1.4% so far during this week, to head for its fifth straight weekly loss, and the largest weekly loss since May, due to weak demand and strong market sentiment.

The market sentiment improved after the EU launched a historic economic recovery fund to support the European countries most hit by the coronavirus pandemic, and upbeat economic data in most parts of the world that indicate a quick global economic recovery from the coronavirus crisis.

Investors are anticipating key economic data releases today on the US manufacturing PMI for July, which will deliver insight on the performance of the industrial activities in the world's largest economy and its recovery from the coronavirus pandemic.

At 13:45 GMT, the initial manufacturing PMI reading for July will be released, with forecasts to rise to 52.0 points in July vs. 49.8 points in June, and the Services PMI reading is expected to rise to 51.0 in July vs. 47.9 in June.