Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Trading

Dollar holds near two-week lows as investors await Fed minutes

2021 04 07T011422Z 1 LYNXMPEH3601B RTROPTP 4 WEALTH BILLIONAIRES OUTLOOK 1 - Global Banking | Finance

By Elizabeth Howcroft

LONDON (Reuters) – The dollar slipped, hovering near two-week lows on Wednesday, after U.S. bond yields stabilized, while market participants waited for the Federal Reserve’s meeting minutes later in the session to help determine the dollar’s future path.

The previous quarter saw a spike in U.S. Treasury yields and the dollar’s strongest rally in years, on rising expectations that accelerating U.S. economic growth and inflation could force the Fed to abandon its pledge to keep interest rates near zero until 2024.

The International Monetary Fund said on Tuesday that unprecedented public spending to fight the pandemic would push global growth to 6% this year.

But the bond market has stabilised this week, with the 10-year U.S. Treasury yield at 1.6579%, down from its peak of 1.776% at the end of March.

“We have seen USD supported by rising bond yields most of Q1…. now that Q2 has begun, yields are coming off slightly which has softened the dollar in the last couple of days,” said Joe Tuckey, FX analyst at Argentex.

At 1100 GMT, the dollar was down 0.1% on the day at 92.21 against a basket of currencies, close to a two-week low, having fallen from a high of 93.439 that it hit on March 30.

“I suspect that we are dealing with broad-based profit taking on market USD longs,” said Valentin Marinov, head of G10 FX research at Credit Agricole.

Marinov said that in the near-term U.S. Treasury yields and global risk appetite would drive the currency market. As long as yields stay within recent ranges, risk appetite could stay strong, keeping the dollar on the back foot and supporting riskier currencies, he said.

Market participants awaiting the release of Fed meeting minutes later in the session for hints about the Fed policymakers’ views on rising yields.

“Investors will be scanning the minutes in search of any ‘discomfort’ among policymakers about rising inflation prospects and in parallel any hint that the discussion is migrating towards defining a timeline for tapering asset purchases,” ING strategists wrote in a note.

“Any (even mild) hawkish signal surely bears the risk of hitting Treasuries, and providing some support to the dollar.”

U.S. money markets are pricing in a 25 basis point hike in December 2022.

Euro-dollar was up 0.1% at $1.18905. So far in 2021, the euro has fallen, with the euro-dollar pair driven by prospects of the economic recovery from COVID-19 in Europe lagging that of the United States and Britain.

Europe’s benchmark equity index, the STOXX 600, closed at a record high on Tuesday, recovering all of its pandemic-driven losses.

Euro zone business activity bounced back to growth last month, underpinned by a record expansion in manufacturing, PMI data showed.

“Optimism is growing in Europe that the pace of its Covid vaccination programme will be faster than thought previously, which has seen the EUR/USD claw back a chunk of the ground lost since last March,” said Stuart Cole, chief macro strategist at Equiti Capital.

The Australian dollar fell against the dollar, down 0.5% at 0.7627, while the New Zealand dollar was down 0.3%, both pausing their upward trajectory of the last two weeks.

The Canadian dollar also fell, hurt by a third wave of the COVID-19 pandemic in the country.

Elsewhere, finance officials from the Group of 20 major economies are poised to back a $650 billion boost in the IMF’s emergency reserves and extend a freeze on debt payments as part of an effort to help developing countries still struggling to combat the COVID-19 pandemic.

(Reporting by Elizabeth Howcroft; Additional reporting by Ritvik Carvalho and Joice Alves; Editing by Kirsten Donovan, Timothy Heritage and Barbara Lewis)

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post