AIRLINK 74.00 Decreased By ▼ -0.25 (-0.34%)
BOP 5.14 Increased By ▲ 0.09 (1.78%)
CNERGY 4.55 Increased By ▲ 0.13 (2.94%)
DFML 37.15 Increased By ▲ 1.31 (3.66%)
DGKC 89.90 Increased By ▲ 1.90 (2.16%)
FCCL 22.40 Increased By ▲ 0.20 (0.9%)
FFBL 33.03 Increased By ▲ 0.31 (0.95%)
FFL 9.75 Decreased By ▼ -0.04 (-0.41%)
GGL 10.75 Decreased By ▼ -0.05 (-0.46%)
HBL 115.50 Decreased By ▼ -0.40 (-0.35%)
HUBC 137.10 Increased By ▲ 1.26 (0.93%)
HUMNL 9.95 Increased By ▲ 0.11 (1.12%)
KEL 4.60 Decreased By ▼ -0.01 (-0.22%)
KOSM 4.83 Increased By ▲ 0.17 (3.65%)
MLCF 39.75 Decreased By ▼ -0.13 (-0.33%)
OGDC 138.20 Increased By ▲ 0.30 (0.22%)
PAEL 27.00 Increased By ▲ 0.57 (2.16%)
PIAA 24.24 Decreased By ▼ -2.04 (-7.76%)
PIBTL 6.74 Decreased By ▼ -0.02 (-0.3%)
PPL 123.62 Increased By ▲ 0.72 (0.59%)
PRL 27.40 Increased By ▲ 0.71 (2.66%)
PTC 13.90 Decreased By ▼ -0.10 (-0.71%)
SEARL 61.75 Increased By ▲ 3.05 (5.2%)
SNGP 70.15 Decreased By ▼ -0.25 (-0.36%)
SSGC 10.52 Increased By ▲ 0.16 (1.54%)
TELE 8.57 Increased By ▲ 0.01 (0.12%)
TPLP 11.10 Decreased By ▼ -0.28 (-2.46%)
TRG 64.02 Decreased By ▼ -0.21 (-0.33%)
UNITY 26.76 Increased By ▲ 0.71 (2.73%)
WTL 1.38 No Change ▼ 0.00 (0%)
BR100 7,874 Increased By 36.2 (0.46%)
BR30 25,596 Increased By 136 (0.53%)
KSE100 75,342 Increased By 411.7 (0.55%)
KSE30 24,214 Increased By 68.6 (0.28%)
Markets

Dollar buoyed by US recovery hopes, bitcoin near record $52,640

  • "Rising US yields have stopped the dollar from declining for now," said Osamu Takashima, the Tokyo-based head of G10 FX strategy at Citigroup Global Markets Japan.
Published February 18, 2021

TOKYO: The dollar held its ground on Thursday after its first back-to-back gains in two weeks as upbeat data bolstered expectations that the US economy would recover from the coronavirus pandemic faster than most of its peers.

Bitcoin traded just shy of the new record high of $52,640 reached overnight, with its roughly 58% surge this month prompting some analysts to warn that the rally might be unsustainable.

Government stimulus cheques helped US retail sales rebound sharply in January, while industrial output and producer prices data also provided robust upside surprises.

Investors expect a further boost from Joe Biden's proposed $1.9 trillion COVID-19 relief package, with the president meeting top labour leaders on Wednesday to drum up support for the plan.

Meanwhile, minutes from the Federal Reserve's policy meeting last month reinforced the central bank's willingness to let the economy run hot while keeping monetary settings ultra-accommodative.

"Biden's stimulus plans, a steep decline in new infections and rapid vaccine rollout leave the US well positioned to recover sooner than most," Westpac strategists wrote in a client note.

"That will generate periodic bouts of USD upside."

However, like many analysts, Westpac's team expects the dollar to decline this year, weighed by the Fed's relentless money printing.

The dollar index was little changed at 90.943 on Thursday in Asia after strengthening 0.2% overnight and 0.4% on Tuesday.

The gauge has gained about 1% this year, rebounding from an almost 7% slide in 2020 that extended to a 2-1/2-year low of 89.206 in early January.

Westpac recommends fresh dollar index shorts on rallies toward 91.0.

The euro was little changed at $1.20385 after sliding 0.5% overnight, the most in two weeks.

The dollar was almost flat at 105.845 yen, following a pullback Wednesday after reaching a five-month high of 106.225.

Treasury yields have given the dollar a boost in recent days, with the yield on the benchmark 10-year note rising as high as 1.333% overnight from around 1.20% at the end of last week. It pulled back in Asia on Thursday to 1.2669%.

"Rising US yields have stopped the dollar from declining for now," said Osamu Takashima, the Tokyo-based head of G10 FX strategy at Citigroup Global Markets Japan.

"In the longer term, we remain bearish on the US dollar: we expect a risk-on environment globally and under such circumstances we think downward pressure on the US dollar could revive."

Takashima expect the dollar to rise to as high as 107 yen before slumping to 102 over the next three months.

Comments

Comments are closed.