Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Up, but Takes Pause on Upward Trend as Risk Aversion Ebbs

ForexJul 21, 2021 12:43AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Gina Lee

Investing.com – The dollar was up on Wednesday morning in Asia but eased slightly from multi-month peaks. Recent risk aversion that gave the greenback a boost ebbed, and selling was light ahead of the European Central Bank (ECB)’s latest policy decision that kept the euro pinned down.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.07% to 93.047 by 12: 36 AM ET (4:36 AM GMT). The index, which is up 2.8% since mid-June, also seemed close to testing its peak of 93.439 touched in March 2021.

The USD/JPY pair inched up 0.05% to 109.89. Japanese trade data released earlier in the day said exports grew 48.6% year-on-year, a fourth consecutive month of double-digit gains, and imports grew 32.7% year-on-year in June.

The AUD/USD pair was down 0.26% to 0.7310, with Australia’s latest retail sales figures falling 1.8% month-on-month. The NZD/USD pair inched down 0.07% to 0.6912.

The USD/CNY pair edged down 0.15% to 6.4746 and the GBP/USD pair inched down 0.08% to 1.3615.

Despite the pause on the way upwards, some investors remained optimistic about the U.S. currency’s prospects.

"The U.S. dollar does seem to have quite an undertow of support," driven mostly by expectations that the U.S. economic recovery could prompt interest rates hikes but also receiving some help from investors’ risk aversion, Westpac analyst Sean Callow told Reuters.

"The general mood on the dollar looks as though it would take a lot to derail the basic narrative of the dollar being in fairly good shape from here to the Jackson Hole conference," the U.S. Federal Reserve’s symposium that takes place in Wyoming in August where the central bank could announce tapering of its bond purchases.

"For the time being you'd probably just prefer to keep long dollars for the next few weeks,” said Callow.

The recent global surge in COVID-19 cases involving the Delta variant continued to drag on Asian currencies, the safe-have yen excepted, as some countries reimplemented restrictive measures.

Investors now await the European Central Bank’s policy decision, to be handed down on Thursday after President Christine Lagarde hinted at a guidance tweak during an interview in the previous week.

With the central bank announcing a new strategy that allows the bank to tolerate inflation above its 2% target and Lagarde saying policy guidance would be tweaked towards this new goal, investors widely expect a dovish tone in Thursday’s policy decision.

"No change in the ECB bias is unlikely to be enough to send the euro higher... at the same time, any ECB shift towards the dovish interpretation of the strategic review would underscore the recent downward euro/dollar trend," ING analysts said in a note.

Bank Indonesia will also hand down its policy decision on Thursday.

Dollar Up, but Takes Pause on Upward Trend as Risk Aversion Ebbs
 

Related Articles

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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
or
Sign up with Email