Dollar Up, Reaches Fresh One-Year High Against Yen on U.S. Economic Recovery Hopes

Dollar Up, Reaches Fresh One-Year High Against Yen on U.S. Economic Recovery Hopes

Investing.com – The dollar was up on Wednesday morning in Asia, rising to a fresh one-year high against the yen over investor bets that fiscal stimulus and an aggressive vaccine rollout will help the U.S. lead a global economic recovery from COVID-19.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.08% to 93.370 by 9:58 PM ET (1:58 AM GMT). The index held above the 93 mark and was on course for its best month since 2016.

The USD/JPY pair was up 0.25% to 110.62, surpassing the 110 mark.

The AUD/USD pair edged up 0.17% to 0.7607 and the NZD/USD pair inched up 0.07% to 0.6985.

The USD/CNY pair inched down 0.07% to 6.5669 with the yuan offshore market the weakest since November 2020. China’s manufacturing Purchasing Managers’ Index (PMI) for March was 51.9, higher than the 51 in forecasts prepared by Investing.com and February’s 50.6 reading. The non-manufacturing PMI was 56.6, surpassing its February reading of 51.4.

The Caixin manufacturing and services PMIs, which look at the private sector, are due later in the week.

The GBP/USD pair inched down 0.01% to 1.3737.

U.S. President Joe Biden later in the day will outline how a $3 to $4 trillion infrastructure plan will be funded. He also targeted opening the U.S. COVID-19 vaccine program to 90% of American adults by Apr. 19 earlier in the week.

On the data front, Tuesday’s Conference Board CB Consumer Confidence index soared to 109.7 in March, the highest level since the beginning of COVID-19. Forecasts prepared by Investing.com predicted a 96.9 figure, while the index was at 90.4 in February.

“U.S. economic outperformance can continue to underpin the dollar in the near term,” Commonwealth Bank of Australia (OTC:CMWAY) currency strategist Carol Kong said in a note.

“The yen will be driven by the general dollar strengthening trend,” potentially rising to 113 by year-end, she added.

The U.S. employment report for March, including non-farm payrolls, is due out on Friday. Investors will watch the figures closely after the Federal Reserve cited the lackluster labor market for its continued dovish stance on interest rates. While the Fed’s stance has boosted the economic outlook, it also continues to raise inflation worries.

Rising U.S. bond yields also gave the greenback a boost, with the yield on the benchmark 10-year Treasury note touching a one-year high of 1.776% on Tuesday.

Meanwhile, bitcoin hovered just below $59,000, working towards touching its record peak of $61,781.83 set earlier in the month again. PayPal Holdings on Tuesday said it launched a ‘checkout with crypto’ service allowing U.S. users to pay online merchants globally with the cryptocurrency.

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