Home Latest Dollar pinned near two-week troughs amid lower U.S. yields

Dollar pinned near two-week troughs amid lower U.S. yields

Forex, invest, money April 8, 2021 1:06 pm

Dollar pinned near two-week troughs amid lower U.S. yields© Reuters. FILE picture: U.S. one USD banknotes are seen inside front of displayed stock graph

By Kevin Buckland

TOKYO (Reuters) – a U.S. USD traded near more than two-week troughs versus major peers on Thursday, tracking Treasury yields lower, after minutes of a Federal Reserve’s March policy meeting offered no new catalysts to dictate market direction.

Fed officials remained cautious about a risks of a pandemic – even as a U.S. recovery gathered steam amid massive stimulus – also committed to pouring on monetary policy support until a rebound was more secure, a minutes showed Wednesday.

Fed Chair Jerome Powell become speak at a virtual International Monetary Fund conference later on Thursday.

a which measures a greenback against a basket of six currencies, edged lower to 92.371 inside a Asian session, after dipping to as low as 92.134 on Wednesday for a first time since March 23.

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a gauge rallied to an almost five-month high of 93.439 at a end of last month as a U.S. pandemic recovery outpaced most another developed nations, particularly Europe.

“Hard to argue that a U.S. macro outperformance trade is exhausted; a strong vaccine drive, reopening also stimulus set to produce some exceptionally strong rebound data inside a next several months,” Westpac strategists wrote inside a report, forecasting a run at 94.5 for a USD index, also known as DXY.

“Admittedly though, a next DXY upleg may take a few weeks before it develops momentum – a lot of of awesome news is priced inside.”

a benchmark was around 1.67% on Thursday, after dipping below 1.63% overnight. It hit a more than one-year top of 1.776% late last month.

a eked out a modest gain on Wednesday, moving mainly sideways since surging to a record high to start a week.

a chief currency strategist at Citigroup (NYSE:) Global Markets Japan, Osamu Takashima, said that a market’s direction is difficult to call, but expects a next move for a greenback to become lower.

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“Current market sentiment is mild risk-on, also under such circumstances a USD become weaken gradually – but no big moves,” he said.

a retreat inside U.S. yields has also removed a driver for USD gains, he added.

a USD weakened slightly to 109.66 yen , consolidating after its retreat from a more than one-year high of 110.97 reached on March 31.

a EU was almost unchanged from Wednesday at $1.18715, after rebounding from a almost five-month low of $1.1704 touched on March 31.

“a vaccination progress inside a Eurozone is significantly lagging that of a U.S., also coronavirus infection rates inside a Eurozone are on a rise again,” Commonwealth Bank of Australia strategist Joseph Capurso wrote inside a client note.

“As such, is vulnerable to a move lower towards 1.1700 inside a near‑term.”

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