Dollar Soars Up Hovering Near Three-Month Low

Published May 24th, 2021 - 09:00 GMT
Dollar Soars Up Hovering Near Three-Month Low
The U.S Federal Reserve’s minutes from its latest meeting, released during the previous week, hinted at a scale-back of asset purchases. However, Fed chair Jerome Powell reiterated that the central bank will not curb its asset purchases soon. (Shutterstock)
Highlights
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.01% to 90.017 by 12:43 AM ET (4:43 AM GMT).

The dollar was up on Monday morning in Asia but remained near its lowest level in three months. Investors remain concerned that the U.S.’ continuous economic recovery from COVID-19 could lead to a slowdown of U.S. stimulus measures earlier than expected.

 

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.01% to 90.017 by 12:43 AM ET (4:43 AM GMT).

The USD/JPY pair edged down 0.11% to 108.82, with Bank of Japan governor Haruhiko Kuroda due to speak later in the day.

The AUD/USD pair inched down 0.04% to 0.7728. Across the Tasman Sea, the NZD/USD pair inched down 0.03% to 0.7168, with the Reserve Bank of New Zealand due to hand down its interest rate decision on Wednesday.

The USD/CNY pair inched down 0.01% to 6.4333 while the GBP/USD pair inched up 0.02% to 1.4150.

The U.S Federal Reserve’s minutes from its latest meeting, released during the previous week, hinted at a scale-back of asset purchases. However, Fed chair Jerome Powell reiterated that the central bank will not curb its asset purchases soon.

"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," Shinichiro Kadota, senior currency strategist at Barclays (LON:BARC), told Reuters.

Several U.S. Fed officials, including Fed Governor Lael Brainard, are also due to speak throughout the week.

Across the Atlantic, the European Central Bank President Christine Lagarde said during the previous week that the uncertain recovery still needs emergency support from the central bank.

“We are committed to preserving favorable financing conditions. It’s far too early and it’s actually unnecessary to debate longer-term issues,” Lagarde said.

“I have repeatedly said that policymakers needed to provide the right bridge across the pandemic, well into the recovery, so we can actually deliver on our mandate.”

On the data front, the U.S. will hand down a slew of data, including CB consumer confidence on Tuesday and initial jobless claims, GDP, and pending home sales figures on Thursday.

Elsewhere in the U.S., Republicans said that a reduction in the price tag for U.S. President Joe Biden’s infrastructure bill, from $2.25 trillion to $1.7 trillion, was still not enough to consider a deal.

On the cryptocurrency front, bitcoin slid over 7% during the weekend after China further cracked down on the trading and mining of the largest digital token. Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk also said during the previous week that the company would not accept bitcoin as payment for its cars.


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