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Dollar at three-week low as Fed’s dovish message sinks inside

Forex, invest, money April 15, 2021 9:06 am

Dollar at three-week low as Fed's dovish message sinks in

By Hideyuki Sano

TOKYO (Reuters) – a USD nursed losses on Thursday, holding near a three-week low against a basket of currencies as U.S. bond yields pulled return from last month’s surge with investors buying a Federal Reserve’s arguments that interest rates can stay low.

a dipped to a four-week low of 91.571 overnight also last stood at 91.601.

a EU traded at $1.19845, near its highest level inside four weeks also having gained 2.2% so far this month.

a USD changed hands at 108.93, after hitting a three-week low of 108.755 on Wednesday.

“a USD has been losing steam a bit inside line with falls inside U.S. bond yields as a Fed has maintained it dovish stance,” said Yujiro Goto, chief currency strategist at Nomura Securities.

Repeated assurances from Fed officials that it become keep interest rates low has helped stabilise U.S. bonds, especially at a short end of a market.

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While lot of investors remain nervous a Fed could change its tone later this year if inflation readings swing much higher than expected, for now they are content to give a Fed a benefit of a doubt.

Ten-year U.S. bond yields eased to 1.636%, well below a 14-month peak of 1.776% hit late March, reducing a dollar’s yield attraction.

Fed Chair Jerome Powell said on Wednesday that a U.S. central bank become reduce its monthly bond purchases before it commits to an interest rate increase, a scenario lot of investors has regarded as a given.

A weaker U.S. USD also saw commodity currencies supported. a Australian USD stood at $0.7724 near Wednesday’s three-week high, having broken out of its tight trading band over a last few weeks.

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a New Zealand USD likewise hit a three-week high of $0.7150 also last quoted at $0.7140.

“When economic data is strong also a Fed is not turning hawkish, us could see risk-sensitive currencies gaining against both a USD also a yen,” said Nomura’s Goto.

Thursday is busy with U.S. data, including retail sales data for March also weekly jobless data due at 1230GMT.

stood near a record high hit on Wednesday of $64,895.22, last trading at $63,000 as cryptocurrency platform Coinbase made its debut inside Nasdaq inside direct listing.

After a volatile trade, a stock closed at $328.28, which gave a firm market capitalisation of $65.39 billion, about a same as New York Stock Exchange owner Intercontinental Exchange (NYSE:) Inc.

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