* Euro, yen jump vs dollar
* Tumbling Treasury yields blunt U.S. interest rate advantage
* Dollar on course for worst week since 2016
(New throughout, updates to U.S. afternoon)
By Saqib Iqbal Ahmed
NEW YORK, March 6 (Reuters) - The U.S. dollar fell across the board on Friday, posting its biggest
weekly loss in four years, as a sharp drop in U.S. government bond yields hurt the greenback's appeal.
The dollar index =USD , which measures the greenback's strength against a basket of six major
currencies, was about 0.7% lower at 95.995, after slipping to a 13-month low of 95.701. For the week, the
index was down 2.2%, its biggest weekly decline since early May, 2016.
"A historic slide in U.S. Treasury yields served as the straw that broke the dollar's back and its
handle on three-year highs reached a couple weeks ago,” said Joe Manimbo, senior market analyst at Western
Union Business Solutions, in Washington.
"Economic uncertainty is spreading about as fast as the coronavirus which is heaping pressure on the
Federal Reserve to follow up its big rate cut this week with another when it meets later this month," he
said.
Investors have slashed expectations for U.S. interest rates after an emergency Fed rate cut of 50
basis points earlier this week to counter the economic fallout from the spreading coronavirus.
Worries about the outbreak have left market fundamentals in the dust, and the 10-year note yield
10YT=RR sank to a record low. That is wiping out the yield advantage that had fueled a popular carry
globally - borrowing at negative rates in the euro and yen to buy U.S. assets. Markets now bet the Fed
will again cut rates by 50 basis points this month.
The euro EUR= was about 0.7% higher at an eight-month high of 1.1311. Against the Japanese yen
JPY= , the dollar was down 0.6% at 105.49 yen, a more than six-month low.
Currency volatility gauges rose on Friday, with one-month euro-dollar implied volatility reaching its
highest since November 2018. The dollar found little support from data that showed U.S. employers maintained a robust pace of
hiring in February, giving the economy a strong boost as it confronts the outbreak that has stoked fears
of a recession. "The print is very impressive," said John Doyle, vice president for dealing and trading at Tempus Inc
in Washington. "But I think the positivity of the numbers will be drowned out by the overarching risk-off
environment today."
Sterling extended gains against the broadly weaker dollar, and was boosted by comments from the
European Union's chief Brexit negotiator that a trade deal between Britain and the bloc was still possible
this year. The currency was up 0.5% at $1.3021 GBP=D3 . Currency bid prices at 4:14PM (2114 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1304 $1.1239 +0.58% +0.84% +1.1354 +1.1213
Dollar/Yen JPY= 105.4200 106.1600 -0.70% -3.17% +106.3400 +105.0000
Euro/Yen EURJPY= 119.16 119.30 -0.12% -2.29% +119.4300 +118.7300
Dollar/Swiss CHF= 0.9380 0.9453 -0.77% -3.08% +0.9466 +0.9320
Sterling/Dollar GBP= 1.3045 1.2954 +0.70% -1.62% +1.3049 +1.2945
Dollar/Canadian CAD= 1.3420 1.3405 +0.11% +3.35% +1.3438 +1.3379
Australian/Doll AUD= 0.6635 0.6613 +0.33% -5.50% +0.6657 +0.6586
Euro/Swiss EURCHF= 1.0605 1.0623 -0.17% -2.28% +1.0629 +1.0576
Euro/Sterling EURGBP= 0.8663 0.8673 -0.12% +2.47% +0.8717 +0.8653
NZ NZD= 0.6351 0.6302 +0.78% -5.72% +0.6372 +0.6295
Dollar/Dollar
Dollar/Norway NOK= 9.2440 9.2855 -0.45% +5.30% +9.3320 +9.2333
Euro/Norway EURNOK= 10.4510 10.4340 +0.16% +6.23% +10.5025 +10.4170
Dollar/Sweden SEK= 9.3713 9.4329 -0.07% +0.26% +9.4691 +9.3345
Euro/Sweden EURSEK= 10.5939 10.6015 -0.07% +1.19% +10.6343 +10.5730