On Thursday, the dollar lost its first two-day winning streak in two weeks. Erik Bregar, the head of FX strategy at Exchange Bank of Canada in Toronto, stated that around 2 am on Thursday, the dollar got sold across the board. That was a precursor to the further weakness of today’s trading.
An unexpected increase in weekly US jobless claims depressed enthusiasm over upbeat data this week. The US Federal Reserve stated at a meeting that it was determined to continue supporting the economic recovery. On the news, the dollar slightly cut its losses against basket world currencies.
Bregar stated that despite higher than expected jobless claims dropping the dollar’s value, tomorrow the market will forget about it. After two days of consecutive gains, the dollar index fell by 0.24% at 90.680.
Investors expect a further increase from President Joe Biden’s proposed $1.9 trillion COVID-19 relief package. Mikael Milhøj, a senior analyst at Danske Bank, stated that the dollar has become increasingly cyclical since there is now a link to Fed’s pricing and expected tapering. Besides, with volatility indices generally low, we also have more room to focus on smaller relative differences, and cross-asset correlations have come down, he said.
Strategists at UBS Global Wealth Management said in a note that market conviction in the weaker dollar has fluctuated as US yields have risen. However, they don’t think it will prevent a longer-term decline in the US currency.
The world should take Bitcoin more seriously
Meanwhile, BTC=BTSP eased off its record high of $52,640 it reached overnight. BTC has risen roughly 78% so far this year. Even though institutional interest ramps up, some analysts warn that the rally might not be upheld. According to Bregar, the world should take Bitcoin more seriously. He added that the bigger the institutional investment involved, the more interested he will get.
Andrew Tu, an executive at quantitative trading firm Efficient Frontier, stated that markets look relatively bullish for the medium run. Several technical indicators at the shorter time frames say that things will top out before heading back up.
The euro EUR=EBS slid 0.5% overnight, the most in two weeks. However, it gained 0.30% to $1.2077.
After Wednesday’s pullback, the yen JPY=EBS gained some ground against the greenback. The dollar was almost flat at 105.800 but still below its 200-day moving average.
Sterling advanced 0.63% against the dollar GBP=D3. It was last at $1.395 and hit a high against the euro of 86.525 pence EURGBP=D3. This year, the pound has been the best-performing G10 currency against the dollar.
- Trading Instrument
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. If you are interested in following the latest news on the topic, please follow Finance Brokerage on Google News.
View original post