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The US dollar extended its gains, reaching fresh 2021 highs vs the EUR and the GBP. EUR/USD bottomed for the day at 1.1225, while GBP/USD fell to 1.3341.
The sour tone of global indexes and higher government bond yields fueled demand for the safe-haven dollar.
Bank of England governor Andrew Bailey said that the bank may not return to offering a hard form of guidance. It is not off the table that we give no guidance at all on rates, with decisions to be made meeting by meeting, the governor added, before stating that the UK labour market is very tight.
USD’s rivals recovered modestly from their intraday lows despite Wall Street edging lower, weighed by a sell-off in the tech sector, with the Nasdaq Composite being the worst performer. The AUD/USD pair trades around 0.7220 while USD/CAD stands at 1.2680.
Higher US government bond yields pushed USD/JPY to its highest since March 2017, with the pair currently trading around 115.00.
Investors’ concerns are related to continued inflationary pressures affecting economic growth, alongside mounting concerns of the spread of coronavirus contagions in Europe.
Contrary to the US dollar, gold shed over 1%, plummeting to $1,781.94 a troy ounce, now struggling to recover above 1,790.
