* Dollar rises, as euro falls after weak PMI data
* Canadian dollar little moved despite stellar retail sales
* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E (New throughout; changes dateline, previous LONDON)
NEW YORK, Aug 21 (Reuters) - The euro fell on Friday as an August batch of business surveys pointed to a stuttering economic recovery, while the U.S. dollar climbed, headed for its first weekly rise since mid-June.
Flash euro zone manufacturing and services purchasing managers index (PMI) numbers for August reported Friday were worse than expected. IHS Markit’s flash Composite Purchasing Managers’ Index, seen as a good gauge of economic health, sank to 51.6 from July’s final reading of 54.9.
The single currency dropped to a one-week low of $1.175 earlier Friday and was last trading down 0.67% at $1.178.
“Clearly the PMI numbers this morning suggest that Europe is losing a little momentum here and that we’re seeing some turbulence in other areas of the global economy. So that is weighing on the performance gap between the U.S. and its major counterparts,” said Karl Schamotta, chief market strategist at Cambridge Global Payments.
The euro, which surged from under $1.12 in early July to a more than-two-year high of $1.197 earlier this week, has been the biggest beneficiary from a dollar whacked recently by concerns about the U.S. economic recovery.
With its Friday rebound the dollar was on course to escape a ninth consecutive weekly decline. Should the greenback end the week down, that would mark the longest losing streak since the summer of 2010 and a run that has only happened five times since 1990.
The recovery in the dollar began on Wednesday after the Federal Open Market Committee released minutes from its last meeting, the tone of which was more dovish than expected. The minutes prompted dollar bears to buy into the heavily shorted currency, fueling its biggest one-day surge in more than two months. Bears have reaped rich returns from shorting the greenback in recent weeks as the United States has struggled to tame the coronavirus pandemic and the unprecedented policy stimulus unleashed by the Fed had darkened the outlook for the safe-haven dollar.
“You’re seeing a bit of an unwind in the short dollar trade that had gained so much momentum in the last couple months,” said Schamotta.
The dollar index, which measures the greenback against a basket of rivals, was last at 93.345, up 0.71%.
Elsewhere, the Canadian dollar was little moved on Friday despite a record increase in retail sales in June.
“Traders got a bit too far over their skis in betting that Canada is going to outperform solidly in the long run,” said Schamotta.
Reporting by Kate Duguid in New York and Tommy Wilkes in London; Editing by Steve Orlofsky
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