News ID: 302233
Published: 0146 GMT April 17, 2021

Dollar at four-week low against currencies

Dollar at four-week low against currencies

The dollar fell to a four-week low against a basket of currencies on Friday evening, still smarting from a sharp drop in US Treasury yields the previous session, and as investors increasingly bought into the Federal Reserve's insistence it would keep an accommodative policy stance for a while longer.

The benchmark 10-year US Treasury yield dipped to a one-month low of 1.528% overnight, moving further away from March's 1.776 percent, its highest in more than a year, even in the face of Thursday's stronger-than-expected retail sales and employment data, according to Reuters.

"It's a little bit of a change of course," said Minh Trang, senior FX trader at Silicon Valley Bank.

Trang cited some profit-taking after the greenback's sharp appreciation in March as well as the recent retreat in Treasury yields as main reasons for the dollar's weakness.

Investors' healthy appetite for riskier assets such as equities has also sapped some of the safe-haven demand the dollar typically enjoys, Trang said.

Some market participants expect the dollar weakness to persist.

"My best guess is the 10-year Treasuries wont move a great deal from here over the coming quarter and that sets the backdrop for the recent dynamics weve seen, with dollar weakness continuing much of this current quarter," Colin Asher senior economist at Mizuho said.

The dollar index measuring the greenback against a basket of six currencies was 0.111 percent lower at 91.561, its lowest since March 18. For the week the index was down 0.7 percent, set for its second straight weekly decline.

San Francisco Fed President Mary Daly said the US economy was still far from making "substantial progress" toward the central bank's goals of two percent inflation and full employment, the bar the Fed has set for beginning to consider reducing its support for the economy.

That echoed Fed Chair Jerome Powell's comments in several speeches over the past week that policymakers will look through near-term rises in prices amid ongoing slack in the labor market.

On Friday, the US Treasury Department said it will continue enhanced engagement with Vietnam and Switzerland, and initiate similar talks with Taiwan after concluding all three countries met the criteria under a 2015 US currency manipulation law.

The Canadian dollar strengthened 0.3 percent against its US counterpart, turning higher for the week, as oil prices gained and the broader decline for the greenback offset domestic data showing a bigger-than-expected drop in wholesale trade.

In cryptocurrencies, bitcoin stood around $61,648.71, below the record high of $64,895 reached on Wednesday, when cryptocurrency platform Coinbase this week made its debut in Nasdaq in a direct listing.

 


 

   
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