Currencies Overview: Dollar Facing Pressure as Sentiment Revives Supported by Hopes of Fresh Stimulus

The US dollar faces limited pressure in Asia today, Wednesday, while the euro is receiving some support, as investors are enthusiastic as political tension subsides in Italy, sentiment improves in Germany, and a renewed focus on spending to mitigate the repercussions of the Corona pandemic in the United States.

The dollar index retreated from its highest level in a month after the statements of US Treasury Secretary candidate Janet Yellen, while the yield on the benchmark 10-year US Treasury bonds, which rose recently due to lending expectations, fell slightly during its strongest session since the beginning of 2021.

The dollar index scored 90.379 on Wednesday. The euro jumped to trade for $ 1.2150, extending the gains it made overnight.

The risk-affected Australian and New Zealand dollars gained modest gains. The Australian dollar last traded 0.3% to $ 0.7719, while the New Zealand dollar rose 0.2% to $ 0.7130.

The euro stabilized against the British pound and held onto its gains against the Japanese yen. The Yen was exposed to a broad sell-off as risk appetite improved on Tuesday, but caution in Tokyo, where stocks fell, bolstered it against the dollar. The yen last traded at 103.76 against the dollar.

The British pound rose slightly to $ 1.3651 as it was supported by speculation by the Bank of England’s chief economist that the British economy would begin “recovering very quickly” in the second half of the year.

The Chinese yuan rose 0.2% to 6.4683 against the dollar in domestic transactions.

As the world awaits the inauguration of US President-elect Joe Biden at midday Washington time (1700 GMT), dealers are focusing more on his policies rather than the inauguration ceremony.

Treasury Secretary Janet Yellen urged members of the House of Representatives to take a big step in terms of stimulus spending at the approval session for her new position and said she believed in market-determined exchange rates without expressing her opinion on the direction of the dollar.