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Vaccines hope to boost the euro, the dollar rebounds when output drops highly

© Reuters. FILE PHOTO: Euro-roll banknotes are placed on US Dollar banknotes

By Hideyuki Sano

TOKYO (Reuters) – The dollar hit a six-week low against its currencies on Tuesday as the euro led a rally thanks to bright prospects for the region’s vaccination program.

The dollar lost traction as US bond yields hovered below their 14-month highs touched last month, reducing the greenback’s appeal.

The euro rose to $ 1.2038, after hitting a six-week high of $ 1.2048 on Monday while the pound rose 1% overnight, the second largest daily gain to date in this year and for the last time it stands at $ 1.3989.

Some analysts think support for the euro may come from the announcement that the European Union has secured an additional 100 million doses of BioNTech’s COVID-19 vaccine and Pfizer (NYSE :).

Zach Pandl, co-head of forex strategy at Goldman Sachs: “Europe is indeed the main region that will see vaccination accelerate this quarter. And later this year, we will see vaccinations. acceleration, generally in the “emerging market economies” (NYSE 🙂 in New York.

“The US was ahead of the trend in the first quarter, but other countries will quickly catch up.”

The index fell to 91,085, down 2.5% from its 5-month peak last month.

These moves go against what happened in the first three months of the year when the dollar appreciated against similar major currencies as yields rose on the US Treasury and yielded higher returns to the silver. blue.

Against the yen, the dollar fell to a low of 107,975 yen, a six-week low and last traded at 108.15.

The yield on a 10-year US Treasury note hit a one-month low of 1.529% last week. Although it rose to 1,605% on Monday it still stands below its March peak of 1,776%, as investors speculate that the Federal Reserve may lower its dovish policy guidance.

“One of the perhaps most important developments in the macro market last month was the stability of the US exchange rate. That also opens room for the dollar’s weakening against many currencies,” Goldman’s Pandl said.

The Aussie dollar held steady at $ 0.7769 after hitting a one-month high of $ 0.7784 on Monday. External loans rose to 6.5075 per dollar, near the highest level in nearly a month.

Gold also hit a 7-week high of $ 1,790 / ounce on Monday and finally $ 1,770.6.

changed hands at $ 54,122, down 1.5% after four consecutive days of losses.

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