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The dollar settled near its lowest level in nearly two weeks against a basket of counterpart currencies, tracking the decline in US Treasury bond yields from their recent peak, despite signs of a strong economic recovery in the United States.
The dollar index fell to 92.527 in the Asian session, its lowest level since March 25th. This comes after it recorded a peak of nearly five months at 93.439.
The Japanese currency continued to recover from its lowest level in more than a year, near 111 yen to the dollar, and strengthened to less than 110 yen for a while today. The euro continued its rise from its lowest level in nearly five months to$ 1.17 and at one point reached a high of $1.1821.
The dollar has rallied strongly since the start of the year, following the Treasury yield gains, as investors bet that the United States will recover faster than other developed countries from the pandemic, amid massive stimulus and a widespread vaccination campaign.
But the dollar’s fall this week even after the much stronger than expected monthly wage data released on Friday and following the announcement of the highest reading of service sector activity ever yesterday, may indicate that most optimistic expectations may have been taken into account at the present time.
The Australian dollar, which is an indicator of risk appetite, fell slightly to $0.76415 today, after rising 0.8% at the weekend. The Reserve Bank of Australia kept monetary policy unchanged on Tuesday, as expected.
The British pound rose to its highest level in two and a half weeks to $1.3915 in Asia, boosting the previous session’s gains of 0.6%.
In cryptocurrencies, bitcoin traded near$ 58,882 today, retreating slightly after the gains it made over two days. The currency hit a record high of $61,781.83 in the middle of last month.
