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FOREX-Dollar firm as COVID-19 resurgence dampens risk appetite

Published 04/21/2021, 10:25 PM
Updated 04/21/2021, 10:30 PM
© Reuters.
EUR/USD
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USD/SEK
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US10YT=X
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(Updates prices and adds analyst comments; previous LONDON)
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By David Henry
NEW YORK, April 21 (Reuters) - The U.S. dollar rose on Wednesday from a seven-week low hit overnight, as
broad weakness in stock markets triggered by a resurgence of COVID-19 cases in India and Japan encouraged a
retreat to the safe-haven appeal of the greenback.
The safety bid also supported the Swiss franc CHF=EBS and the Japanese yen JPY=EBS as the outlook
for the global economy soured.
The rise in the dollar comes after the greenback weakened through much of April as U.S. interest rates
declined and traders bet that vaccinations would open up a stronger global economic recovery and drive
demand for riskier and higher-yielding currencies.
The dollar index =USD , which tracks the U.S. currency against six major peers, was up 0.1% at 91.289
in the morning in New York after slumping overnight as low as 90.856.
The greenback's bounce came with softer U.S. Treasury yields as investors reconsidered how long it might
take before inflation forces the U.S. Federal Reserve to tighten monetary policy and as they saw prices for
oil and stocks hit on Tuesday by the prospect of a slower global recovery because of more COVID-19 cases.
The Federal Reserve's Open Market Committee meets next week and the European Central Bank decides policy
on Thursday. Though neither is expected to signal a change in policy now, traders may hold back from big
bets for a few days, said Joseph Manimbo, senior market analyst at Western Union Business Solutions.
"I think the market is just going to play it carefully in case the Fed changes its tune," Manimbo said.
At the moment, he sees the market acting as though it is at "somewhat of a crossroads for the dollar
given that it has struggled this month."
The benchmark 10-year Treasury yield US10YT=RR hovered just above 1.57% on Wednesday morning, not far
from the 1.60% level at the start of the week, as the note consolidated gains after a reversal that had
driven yields to a 14-month high at 1.7760% last month.
The biggest casualty of the dollar's rise in Wednesday trading was the euro, with the single currency
weakening EUR=EBS 0.24% at $1.2007 after touching a seven-week high of $1.2079 overnight.
The Japanese yen, JPY=EBS often seen as a safer refuge than the dollar, gained against the greenback
to 107.86 but then drifted back to 108.14 on Wednesday morning.
India reported its highest daily toll of 1,761 deaths from COVID-19, while Canada and the United States
extended a land-border closure for non-essential travelers.
In cryptocurrencies, bitcoin BTC=BTSP traded around $55,500, consolidating following its dip to as low
as $51,541.16 on Sunday. It set a record high at $64,895.22 on April 14.

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Currency bid prices at 10:12AM (1412 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 91.2890 91.2210 +0.09% 1.454% +91.4300 +91.1310
Euro/Dollar EUR=EBS $1.2007 $1.2036 -0.24% -1.72% +$1.2044 +$1.1999
Dollar/Yen JPY=EBS 108.1400 108.0950 +0.04% +4.66% +108.2800 +107.8800
Euro/Yen EURJPY= 129.83 130.08 -0.19% +2.29% +130.1100 +129.6500
Dollar/Swiss CHF=EBS 0.9191 0.9159 +0.35% +3.89% +0.9192 +0.9154
Sterling/Dollar GBP=D3 $1.3910 $1.3938 -0.19% +1.82% +$1.3949 +$1.3886
Dollar/Canadian CAD=D3 1.2516 1.2612 -0.75% -1.70% +1.2652 +1.2517
Aussie/Dollar AUD=D3 $0.7729 $0.7725 +0.05% +0.47% +$0.7736 +$0.7699
Euro/Swiss EURCHF= 1.1034 1.1019 +0.14% +2.10% +1.1038 +1.1009
Euro/Sterling EURGBP= 0.8631 0.8631 +0.00% -3.42% +0.8644 +0.8614
NZ NZD=D3 $0.7192 $0.7170 +0.31% +0.15% +$0.7192 +$0.7163
Dollar/Dollar
Dollar/Norway NOK=D3 8.3595 8.3650 -0.05% -2.64% +8.3920 +8.3430
Euro/Norway EURNOK= 10.0385 10.0630 -0.24% -4.09% +10.0899 +10.0226
Dollar/Sweden SEK= 8.4477 8.4325 -0.05% +3.05% +8.4780 +8.4274
Euro/Sweden EURSEK= 10.1435 10.1490 -0.05% +0.67% +10.1751 +10.1417

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World FX rates https://tmsnrt.rs/2RBWI5E
EURUSD and CESI https://tmsnrt.rs/3dCbGpV
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