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Dollar stuck near two-week lows amid lower U.S. yields

Forex, invest, money April 8, 2021 9:09 am

Dollar stuck near two-week lows 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 fiscal stimulus – also committed to pouring on monetary policy support until a rebound was more secure, a minutes showed Wednesday.

a which measures a greenback against a basket of six currencies, was little changed at 92.425 early 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 at 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.

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

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

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

a USD was little changed at 109.78 yen, stabilising after its retreat from a more than one-year high of 110.97 reached on March 31.

a EU consolidated around $1.1865 after rebounding from an almost five-month low of $1.1704, also 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.

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

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Currency bid prices at 109 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar

$1.1866 $1.1873 -0.05% -2.88% +1.1874 +1.1861

Dollar/Yen

109.7350 109.7750 +0.03% +6.31% +109.8900 +109.8100

Euro/Yen

130.22 130.37 -0.12% +2.60% +130.4700 +130.1900

Dollar/Swiss

0.9299 0.9297 +0.04% +5.13% +0.9302 +0.9295

Sterling/Dollar

1.3737 1.3740 -0.02% +0.55% +1.3743 +1.3735

Dollar/Canadian

1.2620 1.2607 +0.13% -0.87% +1.2623 +1.2610

Aussie/Dollar

0.7607 0.7612 -0.05% -1.10% +0.7616 +0.7607

NZ

Dollar/Dollar 0.7007 0.7014 -0.08% -2.40% +0.7014 +0.7005

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ

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