© Reuters. FILE PHOTO: An employee counts US dollar bills at a money exchange office in central Cairo
By Tom Westbrook
SINGAPORE (Reuters) – Dollar rose slightly on Friday but is topping the softest week of the year due to strong data in Europe, surprisingly weak US job data and Federal Reserve Determined to adapt has led investors to cut bets on the greenback.
The euro and yen are also poised for the biggest weekly percentage gains in 4 and 5 months, while the euro, which has fallen 0.9 percent this week, is nearing a two-week low at 92,171.
Kit Juckes, head of FX strategy at Societe Generale (OTC 🙂 said: “In short, energy has gone out of its first quarter dollar recovery, just as it went out. bond sell-off ”.
During the Asian session, the euro fell 0.1% but held above the 200-day moving average at $ 1,1900, while the yen surpassed the 20-day moving average to hold at 109.32. per dollar. Both currencies have gained 1.3% against the dollar so far this week.
The euro also gained more than 2% against the pound this week, bouncing from a one-year low of 84.70 pence on Monday to 86.81 pence, the highest since February, in Contains growing concern over Britain’s reliance on AstraZeneca (NASDAQ 🙂 ‘vaccine s. Sterling is an exception against the dollar this week and has so far dropped 0.7% to $ 1.3723.
The vaccine – developed by Oxford University and considered a leader in the global vaccination race – has been hampered by safety concerns and supply issues. Australia and the Philippines restrict the use of the gun, the African Union rejected plans to buy it and Hong Kong delayed it.
Australian and New Zealand dollars around the top half of the range held them for about two weeks. [AUD/]
Slightly cautious on the stock market and warnings from the Australian central bank about the risk of over-lending devalued, which fell about 0.4% to $ 0.7623 to bring it is on track with 0.4% weekly gain. Prices fell 0.3% to $ 0.7036 and up 0.3% for the week.
The dollar pauses its momentum after a solid rebound from what was once the softest year for the greenback since 2017. Rising treasury yields and growing consensus that the U.S. economy can leading the world out of the pandemic raised the dollar index 3.6% in the previous quarter, the best quarter in nearly three years.
However, after a series of strong data, data on Thursday showed that the US unemployment rate unexpectedly increased.
The Fed speakers also once again vowed to keep monetary policy super easy. Chairman Jerome Powell said the policy will not change until at least one good data series spans at least a month, while board member James Bullard said the Fed should not even discuss changes until it is clear that the pandemic has ended.
According to Davis Hall, Indosuez’s head of capital markets in Asia, a key test will emerge in the coming weeks and months as markets and the Fed face higher inflation and, possibly, higher inflation. recovery of Europe.
Meanwhile, import prices at factories in Europe increased rapidly thanks to surprisingly strong business growth.
“We highly doubt this will maintain a sustained recovery of the dollar,” Hall said on the phone from Hong Kong.
“The dollar / yen could go higher and the dollar / Swiss could go higher, due to the spread, but if the growth of the United States is strong, it is unlikely that it will benefit the dong. dollars on the condition that Europe can start to succeed and their own motivation to vaccinate – that’s the key.
“We are allowing the dollar to appreciate, but we will use the dollar’s recovery power to diversify away from the dollar exposure and we like Asian currencies.”