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Forex Market News - Dollar Up, Even After Fed Sticks to Dovish Tone in its Policy Decision

The dollar was up on Thursday morning in Asia, with the U.S. Federal Reserve System saying it had been in no rush to boost interest rates through all of 2023 even after predicting a V-shaped recovery within the U.S. economy.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.10% to 91.483 by 9:42 PM ET (1:42 AM GMT) but was at its lowest level in two weeks.

The USD/JPY pair was up 0.24% to 109.09.

The AUD/USD pair lost 0.37% to 0.7823 and therefore the NZD/USD pair inched up 0.07% to 0.7245. New Zealand’s GDP posted a surprise contraction of 1% quarter-on-quarter during the fourth quarter of 2020 earlier within the day.

The USD/CNY pair edged down 0.14% to 6.4948 and therefore the GBP/USD pair inched down 0.10% to 1.3950.

Fed Chairman Jerome Powell stuck to his dovish tone as he handed down the Fed's latest policy decision on Wednesday, putting paid to speculation that the central bank would pull back its stimulus as hopes rise for a powerful economic recovery.

“It was the standard Jay in any case ... markets are thinking the Fed will raise rates perhaps once next year and a few of more times in 2023... There’ll remain questions over whether the Fed can control inflation,” State Street (NYSE:STT) Bank Tokyo Branch Manager Bart Wakabayashi told Reuters.

The Fed also predicted that the economy would grow 6.5% in 2021, the most important annual jump in GDP since 1984 and a 2.3 percentage point’s difference from its projection three months ago.


Inflation is predicted at 2.4%, above the Fed’s 2% target. However, seven of 18 Fed officials now expect higher rates in 2023, compared to 5 in December 2020.

The Fed’s comments also sent the ten-year U.S. Treasuries yield on a roller-coaster ride, with yields at around 1.648% during the Asian session.

Some investors remain concerned about potential further market volatility, however.

“While our view remains that movements in yields through the latter a part of February and into March are like a ‘taper-less tantrum’, there's potential for further market volatility, perhaps around ‘data tantrums’ over the approaching months,” Goldman Sachs (NYSE:GS) Asset Management macro strategist Gurpreet Gill said during a note.

In other central bank news, the Bank of England is widely expected to go away its benchmark bank rate at a historic low of 0.1% and its bond-buying program unchanged when it hands down its policy decision later within the day. The Bank of Japan will hand down its own policy decision on Friday.

 

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Dollar Edges Lower; Remains Elevated as Yields Rise

The dollar edged lower in early European trading Friday, but remains at elevated levels, supported by higher Treasury yields following the Federal Reserve's dovish stance.

At 3:50 AM ET (0750 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.2% at 91.710, following a 0.5% jump Thursday, the foremost in two weeks.

USD/JPY was down 0.1% at 108.81, falling slightly after the Bank of Japan widened its target band for the benchmark 10-year yield by an implicit 5 basis points. The move that had been trailed within the press and Bo Governor Haruhiko Kuroda downplayed suggestions that it had been tightening its policy.

GBP/USD rose 0.2% to 1.3951, after weakening 0.3% each day earlier on concerns that the U.K.'s vaccination campaign is about to slow. The Bank of England maintained its easy policy stance at its meeting on Thursday and warned the outlook for Britain's recovery remained unclear.

EUR/USD rose 0.1% to 1.1930 after falling around 0.5% Thursday as a 3rd wave of Covid-19 cases hit large parts of Europe, while the risk-sensitive AUD/USD climbed 0.1% to 0.7762.

Federal Reserve Chairman Jerome Powell made it clear earlier in the week that the central bank will maintain its stance of aggressive monetary stimulus, saying a near-term spike in inflation would prove temporary although the Fed is projecting the strongest U.S economic process in nearly 40 years.

This resulted within the benchmark U.S. 10-year yield climbing over 1.75% overnight, its highest level since January 2020, before easing below 1.70% in early European trading.

“The Fed keeps repeating that inflation are going to be allowed to overshoot which they have to check the inflation first before anything associated with tightening are often just barely considered,” said analysts at Nordica, during a research note.

“This will, in our view, allow USD bond yields and inflation expectations to still increase during Q2 (potentially a lot).”

Looking at the emerging markets, USD/RUB fell 0.3% to 74.115 with Russia’s central bank meeting later Friday. It’s expected to stay interest rates on hold at 4.25%, but pressure is building on the central bank to tighten policy as soaring food prices and a sanctions-weakened currency have driven inflation to the fastest pace in four years. Brazil and Turkey, two of the world's biggest emerging markets, both hiked rates by quite expected earlier in the week to rein in inflation.

USD/TRY fell 0.4% to 7.2904, meaning that the lira has gained over 3.5% against the dollar in the week.

“The Turkish central bank made an aggressive 200bp adjustment to the policy rate on the rear of deteriorating global risk appetite, an uptrend in commodity prices and a weakening lira, adding to elevated inflation risks,” said ING analysts, during a research note.

 

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Dollar hits four-month high as worries over European lockdowns, U.S. taxes sap risk appetite

The dollar hit a four-month high on Wednesday as concerns over a 3rd COVID-19 wave in Europe, potential U.S. tax hikes and escalating tensions between the West and China sapped risk appetite.

The dollar index rose to a four-month top of 92.608 in early London trade, its highest since Nov. 23.

The gauge "looks determined to check the highest end of a replacement , higher 91-93 range we expect will form in coming weeks," Westpac strategists wrote during a client note, adding that extended lockdowns in Europe have sapped confidence in an economic rebound.

"Meanwhile, the U.S. will have a powerful rebound in coming months amid a robust vaccine roll-out, stimulus payments and economic reopening," they said.

The index that measures the greenback's strength against a basket of peer currencies is up nearly 3% year-to-date, confounding widely held expectations among analysts for a decline.

Strategists at BCA Research said they believe the U.S. dollar is experiencing a "countertrend rally within a market."

"Over the near-term, the dollar benefits from two supports. First, the U.S. growth will outperform because of generous economic policy and therefore the country’s lead in vaccinations. Second, the NASDAQ and other highflying global equities are correcting since February, creating some risk-off undertones that help the countercyclical greenback."

"However, real rate of interest differentials will ultimately determine the currency’s cyclical outlook. The Fed’s commitment to maintaining an accommodative policy will cap upside to US real rates at the short-end of the curve. This may prevent a pointy appreciation within the dollar.

The euro hit a four-month low of $1.1812 after Germany extended a lockdown and urged its citizens to remain reception during the Easter holiday.

Worries over the pace of the pandemic recovery were heightened after a U.S. health agency said the AstraZeneca (NASDAQ:AZN) Plc vaccine may have included outdated information in its data.

The flight to safety received a further nudge when Treasury Secretary Janet Yelled told lawmakers that future tax hikes are going to be needed to buy infrastructure projects and other public investments.

Yellen was testifying to the House Financial Services Committee along side Federal Reserve System Chair Jerome Powell, who reiterated that an expected near-term spike in inflation is going to be transitory.

That helped tame U.S. Treasury yields, with the benchmark sinking below 1.6% on Wednesday for the primary time during a week, because it continued its retreat from a quite one-year high of 1.7540% touched last week.

Both Yelena and Powell also are scheduled to testify to the Senate Banking Panel on Wednesday.

Human rights sanctions on China imposed by the us, Europe and Britain, which prompted retaliatory sanctions from Beijing, are adding to plug concerns.

The safe-haven yen, which gained in Asian trade, weakened 0.1% by the beginning of trading in London. Australia's dollar - considered a liquid proxy for risk - weakened further on Wednesday.

The Aussie slipped to as low as $0.7582, A level not seen since Feb. 5.

The British pound weakened as far as $1.3675, also rock bottom since early February.

In crypto currencies, bit coin gained 4% to $56,500, off a record high of $61,781.83.

Seasonal factors are likely exacerbating currency moves, as some investors lock in profits before the quarter-end and therefore the holidays of Easter and Passover, consistent with Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

"The main scenario for the market that the worldwide economy is recovering from the pandemic shock is intact," he said.

"We may even see more of a correction into the beginning of April, but then I expect a restarting of a risk-on trade," with commodity currencies of advanced economies benefitting most, he said.

 

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Forex Market News - Euro Risks Fall Below $1.18 as Third Covid Wave Hits EU, Experts Warn

The euro fell against the dollar Wednesday and will soon be staring down the barrel of a plunge below $1.18 because the third wave of Covid-19 threatens the outlook for the economic bloc.

EUR/USD fell 0.22% to $1.1823 and will continue its bearish trend because the U.S. appears on target for a stronger recovery because of a speedy vaccine rollout, while the EU finds itself within the midst of lockdowns. There was some reprieve on the lockdown front for Germany, Europe's economic engine, as Chancellor Angela Merkel today scrapped plans for harsher Easter lockdown amid widespread criticism.

"The current uncertainty about the third wave … increases the danger that EUR-USD slips below 1.18," Commerzbank (DE: CBKG) said during a note.

Economic data, meanwhile, is probably going to play second fiddle to the continued pandemic dynamic as many expect economic steps in either direction are unlikely to spark the European central bank into action.

"[W]ith the third Covid wave, the info are likely to still look lukewarm for the present, especially compared to the USA," Commerzbank added. "The data publications became less relevant recently as they are doing not cause a decisive decision on the part of the ECB."

The bank's remarks were supported somewhat because the single currency shrugged off economic data showing better-expected manufacturing output within the bloc.

Data on Wednesday showed stronger manufacturing activity for March. The index for manufacturing rose by 4.6 points to a reading of 62.4, while the index for services rose by 3.1 points to a reading of 48.8.

The euro is headed for its second straight slump against the greenback as traders have continued to trim their bullish bets, consistent with data from the Chicago Futures Trading Commission.

Speculative traders cut their net long positions within the euro by 12,000 to 90,000 for the week ended March 16.

 

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Forex Market News -Dollar Edges Down, But Near Multi-Month Highs Over Signs of Economic Recovery


The dollar was down on Friday morning in Asia but was still hovering near four-month highs as positive U.S. economic data, COVID-19 vaccine rollouts and rising Treasury yields all continued to cap the U.S. currency’s losses.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged down 0.13% to 92.790 by 9:47 PM ET (1:47 AM GMT).

The USD/JPY pair inched up 0.05% to 109.33, its highest level since June 2020.

The AUD/USD pair was up 0.31% to 0.7602 and therefore the NZD/USD pair was up 0.32% to 0.6971. The Antipodean risk currencies recovered from their losses earlier within the week and are likely to stay supported due to the 2 countries' success in limiting the economic fallout from COVID-19, consistent with some investors.

The USD/CNY pair inched down 0.04% to 6.5423. The GBP/USD pair edged up 0.16% to 1.3754, with the U.K. to release retail sales figures for February later within the day.

The euro fell against the dollar to $1.1776, the strongest for the greenback since November 2020. Investor sentiment for the only currency has weakened because of fresh lockdowns and delays within the COVID-19 vaccine rollout across the continent.

Although Germany releases its March Ifo Business Climate Index later within the day, which is predicted to point out improved business morale, it's unlikely to prevent the euro’s fall. The slow vaccine rollout and disputes with the U.K. over vaccine exports remain dominant themes for now, consistent with other investors.

There were warnings, however, against chasing the dollar higher from current levels from some corners over worries that the dollar’s gains over the past few weeks are too rapid.

"The euro has broken through the 200-day moving average, which may be a clear sign that it'll still go lower... the yen is getting strong on a number of the crosses, which can cap dollar/yen. Yields have supported the dollar, but this move could start to run out of steam," MUFG Bank head of worldwide markets research Minori Uchida told Reuters.

In the U.S., the amount of initial jobless claims for the week fell to a one-year low of 684,000 from the 781,000 claims filed during the previous week. The amount was also down from the 730,000 claims in forecasts prepared by Investing.com.

Further data, including personal spending in February, is due later within the day and will provide further hints about the U.S. economic strength.

President Joe Biden also pledged to double the U.S. vaccination rollout plan after reaching the previously set goal of 100 million shots 42 days before schedule.

 

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Forex Market News -Dollar Down but Reaches One-Year High Against Yen as Inflation Fears Rise

The dollar was down on Tuesday morning in Asia but reached a one-year high against the yen on Tuesday with climbing Treasury yields, the quickening U.S. COVID-19 vaccination rollout and large U.S. stimulus measures all flaming inflation concerns.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.03% to 92.927 by 10:14 PM ET (2:14 AM GMT), staying near a four-and-a-half month high of 92.964 reached on Monday. The USD/JPY pair edged up 0.11% to 109.91.

The AUD/USD pair edged up 0.18% to 0.7644 and therefore the NZD/USD pair edged up 0.20% to 0.7011.

The USD/CNY pair inched up 0.05% to 6.5714, before China’s release of its manufacturing and non-manufacturing Purchasing Managers Indexes (PMIs) on Wednesday.

The GBP/USD pair inched up 0.10% to 1.3773.

Investor worries about the market impact of Achegos Capital’s collapse also gave the safe-haven U.S. currency a lift, although worries appeared to have died down by the time Asian trading got underway on Tuesday.

The dollar traded as high as 109.89 against the yen on Tuesday, its highest level since March 2020. Also helping the greenback on the trail to its best month since 2016 is that the dollar demand from Japan, as companies begins to face their books at the top of Japan’s financial year in the week.

In Europe, the short-term economic outlook became gloomier as France and Germany introduced tougher restrictive measures to curb a 3rd wave of COVID-19 cases on the continent. Also applying pressure on the euro was the widening spread between U.S. and German bond yields.

The euro remained near the four-and-a-half month low reached on Monday, with March 2021’s decline set to the most important since mid-2019.

On the info front, the U.S. employment report for March, including non-farm payrolls, are going to be released on Friday and closely watched for signs of economic recovery. The Federal Reserve System has cited the labor market’s slow recovery from COVID-19 as a reason for its dovish stance on interest rates.

Some investors were cautiously optimistic.

"In every week when the market is feeling so optimistic about the forthcoming payrolls release, it seems very likely that the greenback will find strong support," with the dollar index looking to check 93, Rabobank currency strategist Jane Foley said during a note.

However, "the market is at risk of pricing in an excessive amount of inflation risk," meaning "we see scope for the dollar to melt within the months ahead," the note added.

Meanwhile, Visa Inc. (NYSE:V) will now allow the employment of crypto currencies to settle transactions on its payment network. The company’s decision pushed bitcoin back near the $57,620 mark on Tuesday, after touching a record $61,781.83 earlier in March.

 

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Forex Market News -Dollar Up, Reaches Fresh One-Year High Against Yen on U.S. Economic Recovery Hopes

The dollar was abreast of Wednesday morning in Asia, rising to a fresh one-year high against the yen over investor bets that fiscal stimulus and an aggressive vaccine rollout will help the U.S. lead a worldwide economic recovery from COVID-19.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.08% to 93.370 by 9:58 PM ET (1:58 AM GMT). The index held above the 93 mark and was on track for its best month since 2016.

The USD/JPY pair was up 0.25% to 110.62, surpassing the 110 mark.

The AUD/USD pair edged up 0.17% to 0.7607 and therefore the NZD/USD pair inched up 0.07% to 0.6985.

The USD/CNY pair inched down 0.07% to 6.5669 with the Yuan offshore market the weakest since November 2020. China’s manufacturing Purchasing Managers' Index (PMI) for March was 51.9, above the 51 in forecasts prepared by Investing.com and February’s 50.6 reading. The non-manufacturing PMI was 56.6, surpassing its February reading of 51.4.

The Caixin manufacturing and services PMIs, which check out the private sector, are due later within the week.

The GBP/USD pair inched down 0.01% to 1.3737.

U.S. President Joe Biden later within the day will outline how a $3 to $4 trillion infrastructure plan is going to be funded. He also targeted opening the U.S. COVID-19 vaccine program to 90% of american adults by Apr. 19 earlier within the week.

On the info front, Tuesday’s Conference Board CB Consumer Confidence index soared to 109.7 in March, the very best level since the start of COVID-19. Forecasts prepared by Investing.com predicted a 96.9 figure, while the index was at 90.4 in February.

“U.S. economic outperformance can still underpin the dollar within the near term,” Commonwealth Bank of Australia (OTC: CMWAY) currency strategist Carol Kong said during a note.

“The yen are going to be driven by the overall dollar strengthening trend,” potentially rising to 113 by year-end, she added.

The U.S. employment report for March, including non-farm payrolls, is due out on Friday. Investors will watch the figures closely after the Federal Reserve System cited the lackluster market for its continued dovish stance on interest rates. While the Fed’s stance has boosted the economic outlook, it also continues to boost inflation worries.

Rising U.S. bond yields also gave the greenback a lift, with the yield on the benchmark 10-year Treasury note touching a one-year high of 1.776% on Tuesday.

Meanwhile, bitcoin hovered slightly below $59,000, working towards touching its record peak of $61,781.83 set earlier within the month again. PayPal Holdings on Tuesday said it launched a 'checkout with crypto’ service allowing U.S. users to pay online merchants globally with the crypto currency.

 

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Forex Market News -Dollar holds near multi-month high on U.S. growth bets

The dollar held near a multi-month high against other major currencies on Thursday as investors bet fiscal stimulus and aggressive vaccinations will help the united states grow faster than other economies.

The dollar's index against a basket of six major currencies hit a five-month high of 93.439 on Wednesday and last stood at 93.209.

The gains came because the euro, far and away the most important component within the index, suffers from concerns the euro zone's economic recovery is being hampered by a 3rd wave of COVID-19 infections.

President Emmanuel Macron ordered France into its third national lockdown and said schools would close for 3 weeks while the currency bloc also lagged the United States in vaccination programmers.

The euro changed hands at $1.1726, after hitting a near five-month low of $1.1704.

Against British pound, the common currency hit a 13-month low of 0.8503 pound and last stood at 0.8509.

The U.S. currency held firm against the yen after ending March with its biggest monthly gains since November 2016.

The dollar traded at 110.74 yen, having risen to as high as 110.97, its highest level during a year.

"Rises in U.S. bond yields on hope of vaccine rollouts and monetary stimulus are boosting the dollar, because the dollar/yen is understood to be particularly sensitive to interest rates differentials," said Yujiro Go to, chief FX strategist at Nomura Securities.

"Yen-selling thanks to Japanese companies' foreign direct investment is returning after a slowdown thanks to the pandemic last year," he added.

Japanese conglomerate Hitachi (OTC: HTHIY) on Wednesday announced $9.6 billion acquisition of U.S. software company Global Logic Inc.

Some traders speculated flows associated with the deal might be behind a number of the dollar's recent rises.

U.S. President Joe Biden announced his long awaited $2 trillion-plus job plan, including $621 billion to rebuild infrastructure.

Coupled with his recently enacted $1.9 trillion corona virus relief package, Biden's infrastructure initiative would give the federal government a much bigger role within the U.S. economy than it's had in generations, accounting for 20% or more of annual output.

But the trouble sets the stage for subsequent partisan clash within the Congress where members are divided on the entire size and inclusion of programs traditionally seen as social services.

That leaves big uncertainties on how the plan will find you, helping to stay immediate market reactions to minimum.

"On the detail handy, this new package would definitely be an enormous positive for the U.S. economy if gone by Congress," said Elliot Clarke, senior economist at Westpac in Sydney.

"However, the $2 trillion of the proposed infrastructure and investment initiatives would be spread across eight years. Further, this is often not $2 trillion in net stimulus. Rather it's to be offset over 15 years by a rise within the corporate rate from 21% to twenty-eight also because the rate multi-national companies pay on overseas profits," he added.

While currency trading is predicted to slow towards the Easter holidays in many parts of the planet, the dollar could gain further if upcoming key U.S. economic indicators surprise on the upside.

A survey by the Institute for Supply Management (ISM) on Thursday is predicted to point out an extra improvement within the manufacturing activity.

Economists expect Friday's job data to point out a rise of about 650,000 payrolls in March while the newest chatter within the market is it could swing higher, and even top a million.

The ADP National Employment Report showed on Wednesday U.S. private payrolls increased by 517,000 jobs last month, slightly less than market forecasts.

In the crypto asset market, bit coin maintained its firmness over the past several days to trade at $58,766.

 

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Forex Market News -Dollar heads for third weekly gain as payrolls data looms

The dollar steadied on Friday before data from the united states that's expected to point out a rise in job creation and a lower percentage for March, because the the world's largest economy maintains a gentle recovery from the pandemic.

Sentiment for the dollar has improved in recent weeks, while Treasury yields have spiked, because the Biden administrations planned stimulus of over $2 trillion and a rapid COVID-19 vaccine roll out spurred economic optimism also as inflation fears.

While trading is probably going to be muted on Friday with many financial markets shut for Easter holidays, analysts say the dollar's ascent to multi-month highs is probably going to continue as more investors back economic recovery.

"It's not just speculators that are depending on the dollar," said Yukio Ishizuki, exchange strategist at Daiwa Securities. "Asset managers also are cutting their shorts in other currencies to form way for a dollar surge."

"As long because the economy improves and Treasury yields rise, the dollar will too," the strategist added.

The dollar last traded at 110.62 yen, shortly from its strongest level during a year.

Against the euro, the dollar was quoted at $1.1777, near a five-month high.

The greenback was steady at 0.9417 Swiss francs, after losing 0.2% on Thursday.

The British pound was little changed at $1.3843.

U.S. nonfarm payrolls due afterward Friday are forecast to possess jumped by 647,000 in March from a 379,000 in February. The percentage is predicted to fall to six .0% from 6.2%.

The dollar index, a gauge of its value against six major currencies, stood at 92.862, on track for its third consecutive week of gains.

Major currencies aren't expected to maneuver much on Friday with financial markets closed Australia, Singapore, Hong Kong, Britain, Europe and therefore the United States, analysts said.

Elsewhere, the Australian dollar edged up to $0.7629, after falling to a three-month low within the previous session.

Across the Tasman Sea, the New Zealand dollar was quoted at $0.7034.

In the cryptocurrency market, bitcoin briefly raised above $60,000 for the primary time in two weeks on the other hand pared gains to trade up 1.49% at $59,601.

 

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Forex Market News -EUR/USD Price Analysis: A move below 1.1700 isn't ruled out


EUR/USD’s bullish attempt falters before the 1.18 mark.
The door remains hospitable a resumption of the downtrend.

EUR/USD fails to re-test the 1.1800 neighborhood on Friday amidst the prevailing consolidative range.

In spite of the bounce seen within the last few sessions, sellers remain on top of things of the worth action round the pair, leaving it susceptible to another move to the YTD lows around 1.1700.

Further south of 1.1700 there are not any relevant support levels until the November 2020 lows within the 1.1600 zone.

While below the 200-day SMA (1.1869) the short-term stance for EUR/USD is predicted to stay negative.

 

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Forex Market News -Dollar Edges Higher After Treasuries Undermine Recent Strength

The dollar was slightly higher in early trading in Europe, still supported by strong retail sales and market data on Thursday, but still on track to finish the week lower, thanks to falling Treasury yields that are making other currencies relatively more attractive.

Various reports suggest that enormous institutional participants like global macro hedge funds have closed out short positions on U.S. Treasuries in the week, having been convinced that the Federal Reserve System won’t be rushed into tightening monetary policy by a spike in inflation rates over subsequent few months. That spike is nearly as good as guaranteed, thanks to the collapse of oil prices in spring 2020, which is creating an enormous base effect on year-on-year rates.

The euro has been a beneficiary because the yield differential has narrowed – not least because the decline in Treasury yields has gone hand-in-hand with signs of a robust U.S. rebound which will support Europe’s export-sensitive economy.

Base effects were also conspicuous during a 63% year-on-year rise in European car sales in March.

Earlier, the Chinese yuan was left largely unmoved by first-quarter gross domestic product data showing that the economy grew slightly but expected. Quarter-on-quarter growth slowed to 0.6% from 2.6% within the fourth quarter of 2020. The dollar rose 0.1% against the offshore yuan to six .5310 but remains down 0.4% on the week.

The news also weakened the Aussie and New Zealand dollars slightly, but these, too, have also made solid gains against the greenback in the week.

Later Friday, the U.S. Treasury is thanks to release its latest report on currency manipulation. The report is predicted to be used as a chance to signal an end to the previous administration’s policy of talking the currency down so as to narrow the U.S. deficit.

In this context, various reports have suggested that China won't be listed as a currency manipulator, but Taiwan – whose exchange reserves have risen sharply within the last year to prevent an undue appreciation of the TWD – is going to be.

The Russian ruble too is ending the week on a robust note. It rose 0.5% against the dollar to 75.91 after the fresh round of U.S. sanctions clothed less punishing than feared. Although U.S. investors are going to be barred from buying Russian sovereign debt within the primary market, they're going to still be allowed to use the secondary market.

The opposite is true for the lira , which is struggling again after the new central bank governor decided to drop his predecessor’s pledge to stay interest rates high for an extended period of your time to bring inflation down. The dollar rose 1.0% against the lira to eight .0872.

 

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Forex Market News -Dollar Faces Weekly Drop Again as Positive Data not Enough, Experts Warn


The dollar looks set to post a second-straight weekly decline Friday, shrugging off a wave positive data earlier in the week , and can still do so as most of the great news has already been priced in, Commerzbank (DE:CBKG) said.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.01% to 91.55.

Data earlier in the week including retail sales and initial jobless claims surprised to the upside, but that drew little support to the dollar. The humdrum reaction suggests "the positive effect of Biden’s economic stimulus package and good vaccination progress within the US is essentially priced in," Commerzbank said. "Strong U.S. data cannot support the U.S. dollar."

With most of the strong data and positive vaccine news now priced in, the greenback will struggle to form gains within the short-term.

The immediate horizon, meanwhile, doesn't offer much reason for optimism for dollar bulls. A hand from the the Federal Reserve System remains always off as Chairman Jerome Powell said the central bank was "highly unlikely" to boost rates before 2022.

"We've said we expect to stay rates where they're until meet three-part test," Powell said Wednesday at a virtual event organized by the Economic Club of Washington. The three part test includes maximum employment, inflation reaching 2%, and on target to run moderately above 2% for a few time.

Biden’s new infrastructure plan, aimed toward long-term economic momentum, however, could provide the ammo needed for the dollar to rediscover its form, but progress on the legislative measure is unlikely until the summer.

"The infrastructure plan is contentious, and if it were to pass Congress, would only become more concrete within the summer, […] for now, the plans are too abstract to support the dollar on a sustainable basis," Commerzbank added.

 

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Forex Market News -Bitcoin slumps 14% as pullback from record gathers pace

Bitcoin, the world's biggest cryptocurrency, fell the maximum amount as 14% to $51,541 on Sunday, reversing most of the large gains it remodeled the past week.

Bitcoin was last trading down 10% at $53,991 as of 1320 GMT, a whopping $12,000 below record highs assail Wednesday. Smaller rival Ether, the coin linked to the ethereum blockchain network, dropped 10% to $2,101.

Luke Sully, CEO at digital asset treasury specialist Ledgermatic, said in an email that folks "may have sold on the news of the facility outage in China and not the impact it actually had on the network".

"The power failure does expose a fundamental weakness; that although the Bitcoin network is decentralized the mining of it's not," Sully added.

Some widely-followed block chain analysts on Twitter pointed to a pointy drop by "hash rate" thanks to the outage.

Hash rate refers to the volatility index that measures the processing capacity of the whole Bitcoin network, and it determines the facility required by miners to supply new Bitcoins.

"Typically shocks to hash rate don't cause price drops. A hash rate reduction slows transactions, which ironically makes it harder to maneuver coins to exchanges purchasable. The recent price drop is well within the bounds of typical volatility, it's noise not signal," said Edan Yago, co-founder at Bitcoin-based decentralized finance protocol Sovran.

The retreat in Bitcoin also comes after Turkey's central bank banned the utilization of cryptocurrencies for purchases on Friday.

Edward Moya, senior analyst at OANDA, said cryptocurrencies had been ripe for a pullback.

"The market has become overly aggressive and bullish on everything," said Edward Moya. "It could are any bearish headline that would have triggered this reaction."

Many cryptocurrency markets operate 24/7, setting the stage for price swings at unpredictable hours. Historically, retail and day traders have driven the moves.

Despite the sudden selloff, bitcoin remains up 89% thus far in 2021, driven by its mainstream acceptance as an investment and a way of payment, amid the push of retail cash into stocks, exchange-traded funds and other risky assets.

 

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Forex Market News -Dollar hovers near one-month low amid subdued U.S. debt yields

The dollar was pinned near a one-month low to major peers on Monday, with Treasury yields hovering near rock bottom in five weeks, after the U.S. Federal Reserve System reiterated its view that any spike in inflation was likely to be temporary.

The safe-haven greenback was also held down by improved risk sentiment amid a rally in global stocks to record highs.

Bitcoin nursed losses from Sunday, when it plunged by the maximum amount as 14% to $51,541. It last traded around $57,020.

The dollar index, which tracks the currency against six rivals, was at 91.623, shortly from the low of 91.484 marked last week, A level not seen since March 18.

The greenback bought 108.655 yen, near rock bottom since March 24.

The euro changed hands at $1.1958, near the very best since March 4.

"The fixed-income market will dominate my world in the week ," with the danger currently skewed to further U.S. yield declines, pressuring the dollar, Chris Weston, head of research at Pepperstone Markets Ltd, a far off exchange broker based in Melbourne, wrote during a client note.

Wall Street's gains amid low volatility "should keep USD rallies contained and attract further USD sellers," he wrote.

Benchmark 10-year yields could fall to as low as 1.47%, from around 1.57% currently, consistent with Weston.

Key technical points are 91.30, the March 18 low, for the dollar index, and $1.2000 for the euro, which could trigger a run to $1.22, he said.

The 10-year Treasury yield sank to as low as 1.5280% last week, from a more-than-one-year high of 1.7760% at the top of last month, reducing the dollar's appeal.

The S&P 500 closed at a record high on Friday, extending a rally in global stocks. MSCI's broadest gauge of world stocks persisted Monday near Friday's all-time peak.

Fed Governor Christopher Waller said on CNBC on Friday that the U.S. economy "is able to rip" as vaccinations continue and activity picks up, but an increase in inflation is probably going to be transitory, echoing comments from other Fed officials including Chair Jerome Powell over the past week.

Dollar net short positioning fell within the latest week to rock bottom level since June 2018, consistent with calculations by Reuters and Commodity Futures Trading Commission data released on Friday.

The chief currency strategist at Mizuho Securities in Tokyo, Masafumi Yamamoto, sees the present quarter as a period of consolidation in U.S. yields and therefore the dollar, with the benchmark Treasury yield potentially dropping below 1.5% and therefore the dollar weakening below 108 yen.

The outline of President Joe Biden's infrastructure spending plan has already been priced in, and there'll be limited progress in negotiations within the near term, Yamamoto said.

But the uptrend in U.S. yields and therefore the dollar will resume within the third quarter, when Congress is probably going to approve the plan, the U.S. vaccine rollout are going to be far along and market speculation a few tapering of Fed stimulus are going to be mounting, he said.

Bitcoin on Monday remained well below the record high of $64,895.22 reached on April 14 following its weekend plunge.

Data website CoinMarketCap cited a blackout in China's Xinjiang region, which reportedly powers tons of bitcoin mining, for Sunday's selloff.

Analysts at National Australia Bank (OTC:NABZY) cited "speculation in several online reports" that the U.S. Treasury may restrict on money laundering within digital currencies for the sharp move lower.

The bitcoin rout also followed a choice on Friday by Turkey's central bank to ban the utilization of cryptocurrencies for purchases.

Despite recent weakness, the world's hottest cryptocurrency remains up 97% in 2021, after quite quadrupling last year.

Mizuho's Yamamoto also pointed to regulatory concerns because the likely trigger for the weekend selloff, but doesn't expect those jitters to scupper the rally long run .

"I would say the larger trend for bitcoin has been the increased use by big financial institutions and corporate like Tesla (NASDAQ:TSLA)," he said. "I think a replacement record high is reachable within the coming weeks."

 

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Forex Market News -Dollar struggles to recover after slump to 7-week trough amid lower U.S. yields

The dollar languished on Wednesday, hovering just above a seven-week low with subdued U.S. bond yields reducing the currency's yield appeal.

The safe-haven greenback got some respite from a pullback in world stocks from record highs as flare ups in corona virus infections from India to Canada soured the outlook for a fast global recovery.

The safety bid also bolstered the yen, which climbed to a fresh seven-week peak of 107.88 per dollar on Wednesday.

The dollar index, which tracks the U.S. currency against six major peers, was at 91.254 in Asia after slumping as low as 90.856 on Tuesday for the primary time since March 3. it's declined 2.1% thus far this month.

The index "has weakened through a key short-term price at 91.30 and may see further downside to the low 90s," with the euro rising to around $1.22, Westpac strategists wrote during a client note.

"We were trying to find the (index) to top in Q3, when second derivative U.S. rebound measures crest and Europe gets her vat act together, but the first indications are that vaccinations across Europe are learning pace already," Westpac said.

The single currency traded at $1.20275, after touching a seven-week high of $1.2079 overnight.

The European central bank decides policy on Thursday, with the Federal Reserve System and Bank of Japan following next week.

The benchmark 10-year Treasury yield was around 1.56%, shortly from its lowest since mid-March, because it continued to consolidate following its retreat from the 14-month high at 1.7760% reached at the top of last month.

"Now that U.S. Treasury yields have started coming off, people are unwinding yen short positions," said Tohru Sasaki, JPMorgan (NYSE:JPM)'s head of Japan marketing research .

The yen could strengthen to 105 per dollar within the near term, he said. Japan's currency was as weak as 110.97 for the primary time during a year at the top of last month.

Declines in U.S. yields and therefore the dollar in April have come as evidence mounted that the Fed would be slower in tightening monetary policy than it had seemed to the market, analysts said.

Some encouragement for the euro came from the announcement that the European Union has secured a further 100 million doses of the COVID-19 vaccine produced by BioNTech and Pfizer (NYSEFE).

Elsewhere though, pandemic developments triggered investor caution.

India reported 1,761 deaths from COVID-19, its highest daily toll, while Canada and therefore the us extended a land-border closure for non-essential travelers.

Asian equities tracked declines on Wall Street, where travel stocks weighed on sentiment.

Oil fell; dragging commodity-linked currencies lower overnight.

The Canadian dollar traded at C$1.26110 to the greenback in Asia, following its biggest plunge in nearly two months on Tuesday. The Bank of Canada is thanks to announce a policy decision later Wednesday.

The Australian dollar, a barometer for risk appetite, weakened 0.2% to $0.77057 after sliding 0.4% overnight.

In cryptocurrencies, bitcoin traded around $55,500, consolidating following its dip to as low as $51,541.16 on Sunday. It set a record high at $64,895.22 on April 14.