Dollar near 3-month low, weighed by prospects of dovish Fed By Reuters

Dollar trades near two-week low as U.S. yields fall By Reuters

© Reuters. FILE PHOTO: Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009. REUTERS/Rick Wilking/File Photo

By Hideyuki Sano

TOKYO (Reuters) – The dollar stood near its lowest level in three months against a resurgent euro, struggling for traction as investors pared earlier bets the U.S. Federal Reserve may soon be ready to taper its stimulus.

The , measuring the greenback against a basket of six currencies, was hovering at 90.027, a tad above a three-month low of 89.646 set on Friday.

Minutes from the Fed’s April policy meeting released last week showed a sizable minority of policymakers wanted to discuss tapering bond purchase.

Still, Fed Chairman Jerome Powell’s repeated warnings that it is not yet time to discuss a reduction in quantitative monetary easing has led many investors to believe it will be months before the central bank actually tweaks policy.

“Inflation figures have been pretty strong but retail sales may be starting to slow down. And the economic outlook hinges on fiscal policy, which is still uncertain,” said Shinichiro Kadota, senior currency strategist at Barclays (LON:).

The White House said on Friday it had pared down its infrastructure bill to $1.7 trillion from $2.25 trillion, with cuts to investments in broadband and roads and bridges, but Republicans dismissed the changes as insufficient for a deal.

Data from U.S. Commodity Futures Trading Commission released late on Friday showed speculators slightly increased their net short dollar positions in the latest week while raising long positions on the euro for four weeks in a row.

The euro traded at $1.2179, off a three-month high of $1.2245 touched on Wednesday.

Some analysts said the currency was capped by comments from European Central Bank President Christine Lagarde on Friday that it is still too early for the bank to discuss winding down its 1.85 trillion euro emergency bond purchase scheme.

Still, the euro and other European currencies have been bolstered by rising optimism about economic reopenings in the region from coronavirus lockdowns.

A preliminary purchasing managers’ index covering the 19-country euro zone’s dominant service industry, published on Friday, bounced to 55.1 from April’s 50.5, well above expectations and its highest since June 2018.

The British pound stood at $1.4144, off Friday’s three-month peak of $1.4233.

The yen was little moved at 108.92 per dollar.

In the volatile cryptocurrency market, bitcoin dropped over 7% during the weekend to last trade at $34,157, having fallen to $31,107 at one point on Sunday.

Ether fell to a two-month low of $1,730 on Sunday, down 60% from a record peak hit just 12 days ago, and last traded at $2,052.

Cryptocurrencies have tumbled after Elon Musk’s Tesla (NASDAQ:) said it will stop accepting bitcoin and after China tightened clampdown on them.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

Share on facebook
Share on twitter
Share on linkedin
0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x

Get Registered For FREE Forex Training!

Fill In Your Details To Get Registered For FREE Forex Training!

Do You Know About Forex Trading?(Required)
Have you done Forex Trading before?(Required)
Where did you hear about us?(Required)