Dollar nurses weekly loss as bounce fades
January 22, 2021 @ 10:11 +03:00
The dollar steadied in a cautious Asia session on Friday but it is set to log its worst week of the year as investors welcomed the Joe Biden administration by seeking out riskier assets. Against the Japanese yen, the dollar has fallen 0.3% this week and it has shed 0.8% against the euro, the largest weekly percentage drops since mid-December.
The dollar last traded steady at $1.2172 per euro and bought 103.54 yen. It advanced a little against the Australian and New Zealand dollars but not enough to derail weekly gains for the Antipodeans, of 0.6% for the Aussie and 0.9% for the kiwi. Biden, whose Democratic Party controls the U.S. Congress, is seeking to borrow and spend to support the economy. The anticipation of stimulus has driven equities to record highs, while inflation expectations have held real yields in check.
Central banks from Tokyo to Frankfurt, Ottawa and Oslo have also this week left policy settings untouched and begun to cautiously talk up recovery prospects, while the U.S. Federal Reserve looks committed to low rates for a very long time. “The underlying driver of Aussie, kiwi and Canadian dollar strength is that their central banks will not be able to keep policy rates at current levels in a global recovery,” said Societe Generale strategy chief Kit Juckes.
Dollar nurses weekly loss as bounce fades, Reuters, Jan 22