Dollar floats close to two-week high against Rivals

The dollar held close a two-week high versus its important opponents on Tuesday, strengthened by a resilient economy and a weakening euro before an upcoming European Central Bank policy meeting.

Dollar banknotes close-up.

Higher U.S. bond outputs kept the dollar well bid, and though rates were off overnight peaks, traders bet the greenback had more going for it than some of its peers.

The euro in particular stayed shaky before the ECB meeting. The ECB is facing growing pressure to address how to protect the euro zone economy from a prolonged slowdown.

In contrast, the dollar has enjoyed in some support from higher U.S. Treasury outputs as data, including fourth quarter gross national product, eased fears of a possibly fast loss in financial momentum.

The dollar index against a group of six major peers was at 96.668 after going as high as 96. 816 the preceding day, its strongest since February 19.

While benchmark U.S. Treasury outputs pulled back from peaks seen in late January, underlying demand for the dollar stayed firm in a sign of confidence over the economic outlook.

The euro was light changed at $1.1337 after shedding 0.25 percent the preceding day, when it brushed an 11-day low of $1.1309.

However, the dollar gained versus the euro. It was on the defensive against the yen as risk aversion in the equity markets supported the Japanese currency. Dollar stocks major indexes tumbled on Monday.

“The dollar firmed, stocks fell and U.S. Treasuries rose in the broader market, and we are bound to see the dollar gain against some currencies while slipping against others in such a situation,” said Shin Kadota, senior strategist at Barclays.

The dollar was effectively flat at 111.81 yen after plunging 0.15 percent on Tuesday. The yen often attracts bids in times of market volatility and political pressures.

“The ECB meeting is unlikely to provide big surprises, but the euro is getting top heavy as the central bank, after all, is expected to strike a dovish tone,” Kadota at Barclays said.

The Australian dollar was nearly flat at $0.7089 after scraping out a 0.2 percent gain overnight on anticipations for more easing of trade pressures between the United States and China.

The Aussie showed restricted response to a series of statements released at the opening of China’s annual meeting of legislature. The currency is sensitive to development in China, Australia’s main trading partner.

The immediate focus was on the result of the Reserve Bank of Australia’s (RBA) March policy assembly later on Tuesday.

The Aussie had taken a large hit last month after the RBA stepped back from its long-standing tightening bias, saying the following move in rates could just as well be down as up.

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