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

Dollar driven back to multi-month low by risk appetite bounce

Economy May 20, 2021 03:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A U.S. one dollar banknote is seen in front of displayed stock graph in this illustration taken May 7, 2021. REUTERS/Dado Ruvic/Illustration

By Stephen Culp

NEW YORK (Reuters) - The dollar retreated on Thursday, hovering near a multi-month low as a risk-on rally drew investors away from the safe-haven currency, reversing Wednesday's bounce.

That bounce was prompted by the minutes from the U.S. Federal Reserve's most recent monetary policy meeting, in which several policymakers said discussions on tapering of government bond purchases would be appropriate "at some point" should economic recovery continue to gather steam.

That gave a boost to the greenback, which had been sliding in recent weeks due to repeated Fed reassurances that it is too soon to tighten its accommodative policy and that current price spikes do not portend longer-term inflation.

"Most of the moves we've seen over the last 24 hours were over the Fed minutes," said Ronald Simpson, managing director, global currency analysis at Action Economics in Tampa, Florida. "The market totally overreacted to them and Treasury yields shot higher."

"After some thought the market has realized the Fed is going to need months of better data before it begins to discuss the taper," Simpson added. "Today, the markets took that to heart and it canceled out the moves we saw yesterday."

A rally on Wall Street and rebounding cryptocurrencies signaled broad, risk-on sentiment which, along with weakening Treasury yields, helped the dollar erase Wednesday's advance.

The dollar index was last down 0.46% at 89.792.

That weakness helped boost the Australian dollar which also got a lift from strong April employment data. It was up 0.56% at 77.71 cents.

The euro gained 0.37%, at $1.2219, and the dollar fell 0.38% to 108.80 Japanese yen.

Canada's robust economy and rising commodity costs have pushed the Canadian dollar to its strongest level against the dollar since 2015. The dollar was last down 0.60% against the loonie, at $1.2059.

The cryptocurrency rollercoaster was on an upswing in the wake of a steep sell-off following China's regulatory move against the digital assets.

While that sell-off reversed course with the help of bargain hunters, cryptos were last well off their session highs.

Bitcoin was most recently up 8.9% at $40,050 after plummeting to 54% below its record high, hit just over a month ago, after some of its prominent backers reiterated their support for the digital currency.

Smaller rival ether gained 15.32 to $2,811. On Wednesday, it fell 22.8%, its biggest daily fall since March 2020.

Dollar driven back to multi-month low by risk appetite bounce
 

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.
Comments (3)
Joel Schwartz
Joel Schwartz May 20, 2021 12:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
End the game, FEDs. People aren’t going back to work because the stock market is easier money than working these days. Take the training wheels off with QE & interest rates and people will go back to work in no time.
John Healy
John Healy May 19, 2021 11:24PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
“... contained wordings that APPEAR to SEEK to START discussion...” (emphasis mine). That hardly seems like a plan. Here’s the irony; if the Fed tries to taper bond purchases then the bond market will completely collapse and yields will explode, especially on the long end of the curve.
seth raz
seth raz May 19, 2021 10:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They will be no taper
Edward Chong
Edward Chong May 19, 2021 10:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
becos jobs wont recover in the next few months.
 
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
Continue with Google
or
Sign up with Email