Investing.com – The dollar was up on Friday morning in Asia but was set to end the week with its worst back-to-back weekly drop in 2021. Treasury yields continued their retreat from more-than-one-year highs as investors increasingly bought into the U.S. Federal Reserve’s pledge of continued monetary support.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.10% to 91.713 by 12:59 AM ET (4:59 AM GMT).
The USD/JPY pair inched up 0.06% to 108.81.
The USD/CNY pair edged up 0.12% to 6.5296. Chinese economic data released earlier in the day said that the GDP for the first quarter grew 18.3% and 0.6% year-on-year and quarter-on-quarter respectively in March. Although both figures were lower than forecasted, economic growth soared on a yearly basis while slowing down on a quarterly basis.
The GBP/USD pair edged down 0.14% to 1.3767.
The benchmark 10-year Treasury yield fell to a one-month low of 1.528% during the previous session, from as high as 1.776% at the end of March 2020, even after Thursday’s stronger-than-expected U.S. retail sales and initial jobless claims data.
San Francisco Fed President Mary Daly also said on Thursday that the U.S. economy is still far from making “substantial progress” toward the central bank’s goals of 2% inflation and full employment when it will begin to consider reducing its support for the economy.
Investor bets that massive fiscal spending in addition to continued monetary easing will spur faster U.S. economic growth and runaway inflation drove the dollar index, alongside Treasury yields, to an almost five-month high on the final day of March. However, investors now seem more willing to accept the Fed’s assurance that inflation pressure will be transitory and monetary stimulus will remain in place for years to come.
The dollar is “still struggling to find its feet in April, even though the U.S. macro outperformance narrative could not be more propitious,” Westpac strategists said in a note.
“The DXY is trading like it’s topping out now, sooner than (we) expected,” the note added.
The Russian rouble tumbled during the previous session, losing 2% to the dollar and hitting a more than five-month low versus the euro in volatile trade. The U.S. slapped sanctions against Russia on Thursday after U.S. President Joe Biden authorized the move to punish Moscow’s alleged interference in the 2020 U.S. presidential election. Russia has denied the allegations, however.
In cryptocurrencies, bitcoin traded at $63,478, near the record high of $64,895 reached on Wednesday when cryptocurrency platform Coinbase Global Inc. (NASDAQ:COIN) made its Nasdaq debut.
To read the full article, Click Here