The dollar increased from a seven-week low
The U.S. currency increased on April 21 from a seven-week low hit overnight. It was spurred by broad weakness in stock markets triggered by a resurgence of coronavirus infection in countries from India to Japan. Therefore, it increased renewed appetite for the safe-haven appeal of the dollar.
The dollar has declined by more than 2% in April after a strong March rally. Moreover, investors bet that a global economic recovery premised on a speedy rollout of vaccines would boost demand for non-dollar currencies such as the euro and the Australian dollar.
The dollar index, which measures the U.S. currency against six major peers, increased by 0.11% at 91.321 in London trading. On Tuesday, it fell as low as 90.856for the first time since March 3.
The dollar’s bounce was also followed by softer U.S. Treasury yields.
Meanwhile, the benchmark 10-year Treasury yield was about 1.58%, not far from its lowest since mid-March. Remarkably, it continues to consolidate following its retreat from the 14-month high at 1.7760% hit reached at the end of the previous month.
The euro is likely to decrease to $1.15 by the end of the year
The currency declined by 0.25% at $1.2000 after hitting a seven-week peak of $1.2079 overnight.
The euro has benefited from the dollar’s weakness in the last weeks. According to Georgette Boele, an economist at ABN Amro, the euro is expected to decline further in the following days due to U.S. economic outperformance and repricing of ECB rate expectations.
Georgette Boele anticipates the euro to decrease to $1.15 by the end of the year.
Moreover, the European Central Bank decides policy on April 22, with the Federal Reserve following next week.
India reported its highest daily toll of 1,761 deaths from coronavirus, while Canada and America extended a land-border closure for non-essential travelers.
Risk-sensitive currency, the Australian dollar, a barometer for risk appetite, nursed losses at $0.7717 after declining 0.4% overnight.
Furthermore, the largest cryptocurrency in the world, Bitcoin, was trading near $55,000. The currency recovered after a sharp dip on Sunday when it touched $51,541.16. Remarkably, the dominant cryptocurrency, $51,541.16, hit an all-time high of $64,895.22 on April 14.
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