The dollar trades close to nine-week lows

The United States Dollar traded close to nine-week lows on April 29. Remarkably, the dovish outlook from the FED and bold spending plans from the White House gave a green light for the global trade.

Remarkably, Biden’s push for another $1.8 trillion in spending also risked expanding the U.S. budget and trade deficits.

Meanwhile, the euro reached its highest since late February at $1.2150 before steadying at $1.2126.

Additionally, Fed Chairman Jerome Powell did the dollar no favors by quashing speculation about an early tapering of asset buying. According to him, employment was still far short of target.

The U.S. dollar index stood at 90.606 against a basket of currencies. Remarkably, the index hit an all-time high of 93.439 at the end of the previous month.

the dollar declined to a three-year low against the loonie at C$1.2283

According to Jane Foley, head of FX strategy at Rabobank, the dollar has been recouping the ground lost initially after the Fed’s patient message on policy yesterday. Foley added that bond yields are a little higher this morning and the market is likely to see a very robust Q1 GDP report today.

The Fed’s dovishness was in marked contrast to the Bank of Canada. It has already started to taper its asset-buying, sending the dollar declining to a three-year low against the loonie at C$1.2283.

Another notable break lower came against the Norwegian crown, where the greenback hit its lowest since October 2018 at 8.1460 crowns.

The Norwegian crown has been buoyed by increasing oil prices as the global economic recovery raises demand for commodities. This trend is also benefiting the risk-sensitive currencies, Australian and New Zealand dollars.

Moreover, the American currency also declined against the Japanese yen. The dollar dipped to 108.86 from Wednesday’s top of 109.07 against the yen. Remarkably, a holiday in Japan kept it contained in Asian hours, although the greenback reclaimed some ground and increased to 108.80 yen in early London deals.