Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

U.S. Dollar Selloff Resumes

By MarketPulse (Jeffrey Halley)ForexMay 21, 2021 04:14AM ET
U.S. Dollar Selloff Resumes
By MarketPulse (Jeffrey Halley)   |  May 21, 2021 04:14AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Dollar dips as inflation fears abate

Benign US data eased inflation nerves overnight, lifting risk sentiment and pushing US yields lower. That was enough to spur a sell-off in the US dollar as investors moved positioning once again, out of haven greenbacks. The dollar index fell by 0.47% to 89.75, where it remains in Asia. Despite the volatility of the week, the dollar index has traded in a choppy 89.70 to 90.20 range, with plenty of whip-sawing for anyone looking for it. A close below 89.70 for the week will signal the US dollar sell-off will resume next week.

The EUR/USD and GBP/USD have recouped almost all of their intra-week losses, rising to 1.2230 and 1.4180, respectively. If all goes to plan, EUR/USD should overcome resistance at 1.2250, targeting 1.2350 initially. GBP/USD has resistance at 1.4225, opening the road to a more substantial rally to 1.4400. Only a fall through 1.2150 or 1.4000 materially changes the bullish picture.

The Australian and New Zealand dollars have climbed to 0.7760 and 0.7190 today, but as barometers for global risk sentiment, neither are quite out of the woods yet. AUD/USD needs to hold support at 0.7680, rising through 0.7820 to ease reversal fears. NZD/USD needs to keep support around 0.7150 and remain the more vulnerable of the pair post-budget.

Asian currencies have had a mixed performance, with the Singapore dollar, Indonesian rupiah and Malaysian ringgit losing ground on Covid-19 nerves and falling oil prices. Elsewhere, the Thai baht and South Korean won all rallied, likely on a lower dollar index and falling oil prices. The Chinese yuan remained steady, with USD/CNY continuing to range between 6.4000 and 6.4500.

The mixed picture in Asia reflects local drivers of sentiment, exposure to commodity prices and a correlation to US strength or weakness. While the euro and pound have a vaccination premium baked into them, the picture on that front is much more mixed in Asia. An easing of US inflation fears should be a medium-term positive for regional currencies, most of which have some sort of dirty peg to the greenback. But I expect local issues to give a mixed picture in the short term.

Original Post

U.S. Dollar Selloff Resumes

Related Articles

Blake Morrow
Chart Of The Day: EUR/GBP By Blake Morrow - Jan 24, 2022

EUR/GBP has been in a descending channel since spring 2021, and the pair just rallied past the .8380 breakdown point leaving the bears being the "bag holders" near term. The...

Kenny Fisher
Euro Dips Despite Strong Data By Kenny Fisher - Jan 24, 2022

The euro has edged lower at the start of the week and dipped below the 1.13 line in the European session. EUR/USD is trading at 1.1315 in the North American session, down 0.25% on...

U.S. Dollar Selloff Resumes

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Sarahmay Miguela
Sarahmay Miguela May 21, 2021 9:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
how can I claim
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email