The dollar relinquished early safe-haven gains on Friday, trading little changed heading into the close as falling long-term Treasury yields and negative-rates speculation dimmed the U.S. currency's allure, while sterling languished in Brexit uncertainty nL1N2E31D9.
Risk aversion stood out as the dominant characteristic of the session as rising COVID-19 infection rates raised doubts about hopes for a quick post-pandemic recovery that had swept through markets in recent weeks.
Reflecting those concerns, fed funds futures flirted with negative short-term U.S. interest rates beginning in June 2021, which took a bite out of the dollar's early gains.
Dollar buying before the London fix sent EUR/USD to session lows at 1.1195, but it reversed course in the U.S. afternoon, lifting the euro back toward European peaks to stand 0.08% higher at 1.1227 nL1N2E31EJ.
USD/JPY reversed off early U.S. lows by 106.80, making it back near break-even around 107.18 nL1N2E31EW. That left it on track for a close above the 10-day moving average by 107.01, which would lend support to the dollar's bullish cause versus the yen.
A close above the 55-DMA at 107.41 and 38.2% Fibo of June’s 109.85-106.08 range -- likely work for another day -- could accelerate momentum higher.
GBP/USD was the clear loser on Friday, down 0.67% in late trade after striking a one-month low of 1.2314. Worries about UK growth owing to COVID-19 and heightened risks that Britain and the EU will fail to reach a trade agreement by the current post-Brexit transition deadline of Dec.
31 remain a weight on sterling nL1N2E30WI.
AUD/USD slid from its U.S. open at 0.6889, falling victim to the tide of risk aversion and unable to mount a rally as commodities remained under pressure nL1N2E31DW.
NYMEX crude was down 0.67% and copper was off 0.09%.
Gold recovered from early losses to end up 0.33%, while silver slid 0.51%.