Dollar finds footing on U.S. economy as euro falters
March 29, 2021 @ 09:28 +03:00
The dollar began the week on a firm footing, inching toward a milestone peak against the euro on Monday, as a cautious market mood pushed investors to safety while U.S. economic strength and a rapid vaccine rollout also added to the greenback’s shine. The euro was down 0.1% in the Asia session at $1.1783, not far above last week’s four-and-a-half-month trough of $1.1762 and well below its 200-day moving average of about $1.1866.
The common currency is headed for its worst month since mid-2019 as Europe’s faltering vaccination programme runs into a wave of new infections, a bearish signal as positioning data shows investors remain heavily long euros. “The euro has continued to fall … even as long-term U.S. yields have lost some upward momentum,” analysts at MUFG Bank said in a note. “It suggests euro weakness was driven more by concerns over the weakening outlook for growth in the eurozone in light of rising COVID cases.”
Virus-driven caution also helped the dollar higher against the Australian dollar, New Zealand dollar and sterling and it rose against oil-liked currencies as the re-floating of the ship blocking the Suez Canal pushed crude prices down by about 1.5%. Concern in equity markets at the widening fallout from a wave of liquidations linked to investment fund Archegos Capital also put investors in a careful mindset. Only the safe-haven Japanese yen made headway, scraping from a 10-month low it made on Friday to inch about 0.2% higher to 109.43 — though along with the Swiss franc it remains at the bottom of the G10 leaderboard this year.
U.S. jobless claims fell to a one-year low last week and President Joe Biden said he would double his vaccination goal, after surpassing 100 million shots 42 days ahead of schedule. In contrast, European inoculations have been hit by supply problems and safety concerns. Investors are looking ahead to Purchasing Managers Index figures due midweek and for some details of Biden’s infrastructure spending plan. However the main data will be U.S. hiring figures due on Good Friday.
Dollar finds footing on U.S. economy as euro falters, Reuters, Mar 29