AGL 38.15 Increased By ▲ 0.90 (2.42%)
AIRLINK 121.51 Decreased By ▼ -2.51 (-2.02%)
BOP 5.85 Increased By ▲ 0.23 (4.09%)
CNERGY 3.75 Increased By ▲ 0.03 (0.81%)
DCL 8.40 Increased By ▲ 0.15 (1.82%)
DFML 40.89 Increased By ▲ 0.62 (1.54%)
DGKC 84.60 Decreased By ▼ -1.14 (-1.33%)
FCCL 32.70 Increased By ▲ 0.10 (0.31%)
FFBL 65.50 Decreased By ▼ -1.00 (-1.5%)
FFL 10.05 Decreased By ▼ -0.11 (-1.08%)
HUBC 103.80 Increased By ▲ 0.70 (0.68%)
HUMNL 13.25 Decreased By ▼ -0.15 (-1.12%)
KEL 4.43 Increased By ▲ 0.18 (4.24%)
KOSM 7.09 Decreased By ▼ -0.09 (-1.25%)
MLCF 37.50 Decreased By ▼ -0.80 (-2.09%)
NBP 60.25 Decreased By ▼ -4.76 (-7.32%)
OGDC 172.25 Decreased By ▼ -1.55 (-0.89%)
PAEL 24.80 Decreased By ▼ -0.10 (-0.4%)
PIBTL 5.70 Decreased By ▼ -0.10 (-1.72%)
PPL 141.69 Decreased By ▼ -1.01 (-0.71%)
PRL 22.72 Decreased By ▼ -0.26 (-1.13%)
PTC 14.74 Decreased By ▼ -0.37 (-2.45%)
SEARL 64.56 Decreased By ▼ -0.79 (-1.21%)
TELE 7.14 Increased By ▲ 0.14 (2%)
TOMCL 35.50 Decreased By ▼ -1.41 (-3.82%)
TPLP 7.29 Decreased By ▼ -0.05 (-0.68%)
TREET 14.20 Decreased By ▼ -0.08 (-0.56%)
TRG 51.75 Increased By ▲ 2.05 (4.12%)
UNITY 26.60 Increased By ▲ 0.45 (1.72%)
WTL 1.22 Decreased By ▼ -0.02 (-1.61%)
BR100 9,483 Decreased By -118.3 (-1.23%)
BR30 28,371 Decreased By -202.1 (-0.71%)
KSE100 88,967 Decreased By -1319.8 (-1.46%)
KSE30 27,827 Decreased By -515.9 (-1.82%)
Markets

Dollar drifts lower as Fed minutes-fuelled bounce fades

  • In the Fed minutes, several policymakers said a discussion about reducing the pace of asset purchases would be appropriate "at some point" if the US economic recovery continues to gain momentum.
  • "The Fed minutes might end the recent period of dollar weakness for now, but it is still too early for a trend reversal," Commerzbank strategists said in a daily note.
Published May 20, 2021

LONDON: The US dollar slipped on Thursday but remained well above three-month lows hit overnight after minutes from the Federal Reserve's last policy meeting showed there was more talk of it tapering its bond purchases than investors had expected.

In the Fed minutes, several policymakers said a discussion about reducing the pace of asset purchases would be appropriate "at some point" if the US economic recovery continues to gain momentum.

That surprised markets, with some investors unwinding some of their short dollar positions and pushing the dollar higher as they believed the Fed would remain on hold for the foreseeable future despite strong data.

However, the dollar's gains fizzled partially in London, trading with the greenback declining against most of its peers. Against a basket of its rivals, the dollar was down 0.25% at 90.00 but remained above a late-February low of 89.686 hit on Wednesday.

The dollar's overnight bounce coincided with a spike in US Treasury yields and weaker stocks. Fed fund futures pricing for rate changes in late-2022 and early 2023 remain steady from earlier this week.

"The Fed minutes might end the recent period of dollar weakness for now, but it is still too early for a trend reversal," Commerzbank strategists said in a daily note.

The dollar has been declining over the past few weeks as key Fed officials have repeatedly said they were not ready to discuss reducing stimulus, judging that spikes in inflation would be transient.

The biggest beneficiary of the weak dollar trend was the Aussie dollar which also received a boost from robust April jobs data. It was up 0.4% at $0.7749.

The euro hopped 0.2% higher at $1.22 after having slipped 0.4% in the previous session and off a three-month high of $1.2245.

Cryptocurrencies were volatile after suffering one of their biggest losses on Wednesday in the wake of China's decision to ban financial and payment institutions from providing digital currency services.

Bitcoin last traded up 10% at $40,526, having fallen as low as $30,066 on Wednesday, which represented a whopping 54% fall from its record high hit just over a month ago.

Smaller rival Ether gained 13% at $2,765. On Wednesday, it fell 22.8%, its biggest daily fall since March 2020.

Comments

Comments are closed.