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Dollar Down, as U.S. Yields Fall, Bets on Fed Tightening Slide

ForexApr 07, 2021 01:05AM ET
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© Reuters.

By Gina Lee

Investing.com – The dollar was down on Wednesday morning in Asia, as U.S. bond yields fell and investors retreated from aggressive expectations that the U.S. Federal Reserve will tighten its policy earlier than expected.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.02% to 92.330 by 12:51 AM ET (4:51 AM GMT). The index hovered near a two-week low, slipping further from a five-month high of 93.439 set on Mar. 31.

The USD/JPY pair inched down 0.01% to 109.73 continuing its decline from the one-year high of 110.97 reached during the previous week.

The AUD/USD pair inched down 0.08% to 0.7655 and the NZD/USD pair inched down 0.01% to 0.7056.

The USD/CNY pair inched up 0.05% to 6.5403. Investors digested the Caixin services Purchasing Managers Index released by China on Tuesday, with March’s reading at 54.3, higher than February’s 51.5 reading. China will release inflation data, including the Consumer Price and Producer Price indexes, on Friday.

The GBP/USD pair inched up 0.04% to 1.3829.

A rosier economic outlook, with U.S. economic growth and inflation both accelerating, could see the Fed tightening its policy earlier than indicated. Interest rate futures earlier in the week priced in a rate hike as early as late 2022.

Investors now await the minutes from the Fed’s March meeting later in the day, and chairman Jerome Powell’s remarks at a panel about the global economy a day later.

Meanwhile, U.S. Treasury yields also fell, with the five-year note dropping sharply to 0.874% after hitting a 14-month high of 0.988% on Monday. The note is now viewed as a major barometer of how much faith investors have in the Fed's pledge that it does not expect to raise interest rates until 2024.

Some investors view the dollar's retreat as a correction after its rally in February. Against the yen particularly, the greenback recorded its biggest monthly gains in more than four years in March, rising almost 4%.

"Last quarter, the dollar got a boost from the Senate runoff in Georgia, Biden administration's COVID-19 relief package and then infrastructure plan. This quarter we are running out of such big themes and the market will be looking to economic fundamentals. We expect the dollar to remain strong, but it is unlikely to rise as much as it did last quarter," Barclays (LON:BARC) senior currency strategist Shinichiro Kadota told Reuters.

On the cryptocurrency front, Bitcoin was flat at $57,966.

Dollar Down, as U.S. Yields Fall, Bets on Fed Tightening Slide
 

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Rebecca Hamilton
Rebecca Hamilton 2 hours ago
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𝚑𝗼𝘄 𝗱𝗼𝗲𝘀 𝗹𝗶𝗳𝗲 𝗳𝗲𝗲𝗹 𝘄𝗵𝗲𝗻 𝗺𝗼𝗻𝗲𝘆 𝗶𝘀 𝗻𝗼𝘁 𝗮𝗻 𝗶𝘀𝘀𝘂𝗲? 𝘄𝗵𝗮𝘁 𝗶𝘀 𝗶𝘁 𝗹𝗶𝗸𝗲 𝘁𝗼 𝗵𝗮𝘃𝗲 𝗮𝗹𝗹 𝘆𝗼𝘂𝗿 𝗯𝗶𝗹𝗹𝘀 𝗮𝗻𝗱 𝗱𝗲𝗯𝘁𝘀 𝗽𝗮𝗶𝗱 𝗶𝗻 𝗳𝘂𝗹𝗹? 𝘄𝗵𝗲𝗻 𝗰𝗮𝗻 𝘆𝗼𝘂 𝗱𝗼 𝘄𝗵𝗮𝘁 𝘆𝗼𝘂 𝘄𝗮𝗻𝘁, 𝘄𝗵𝗲𝗻 𝘆𝗼𝘂 𝘄𝗮𝗻𝘁? 𝘁𝗵𝗲𝗿𝗲 𝗶𝘀 𝗻𝗼 𝗻𝗲𝗲𝗱 𝘁𝗼 𝘄𝗼𝗻𝗱𝗲𝗿 𝗮𝗻𝘆𝗺𝗼𝗿𝗲. 𝘁𝗵𝗶𝘀 𝗮𝗽𝗽 𝗶𝘀 𝘁𝘂𝗿𝗻𝗶𝗻𝗴 𝗼𝗿𝗱𝗶𝗻𝗮𝗿𝘆 𝗽𝗲𝗼𝗽𝗹𝗲 𝗶𝗻𝘁𝗼 𝗺𝗶𝗹𝗹𝗶𝗼𝗻𝗮𝗶𝗿𝗲𝘀 𝗮𝗻𝗱 𝗵𝗲𝗹𝗽𝗶𝗻𝗴 𝘁𝗵𝗲𝗺 𝗳𝗶𝗻𝗮𝗹𝗹𝘆 𝗹𝗶𝘃𝗲 𝘁𝗵𝗲 𝗹𝗶𝗳𝗲𝘀𝘁𝘆𝗹𝗲 𝗼𝗳 𝘁𝗵𝗲𝗶𝗿 𝗱𝗿𝗲𝗮𝗺𝘀. 𝚑𝗲𝗿𝗲 𝗶𝘀 𝘁𝗵𝗲 𝗹𝗶𝗻𝗸:𝘃𝘂𝗿𝗾𝗼𝗽𝗹.𝗴𝗾
Shawn Ayala
Shawn Ayala 4 hours ago
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𝘁𝗵𝗶𝘀 𝗶𝘀 𝘁𝗵𝗲 𝗳𝗮𝘀𝘁𝗲𝘀𝘁 𝘄𝗮𝘆 𝘁𝗼 $ 10,000 𝗽𝗿𝗼𝗳𝗶𝘁. 𝚐𝘂𝗮𝗿𝗮𝗻𝘁𝗲𝗲𝗱. 𝗮𝗱𝗲𝗶𝗱𝗸𝗮.𝘁𝗸
Brandi Prakash
Brandi Prakash 5 hours ago
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𝚑𝗼𝘄 𝗱𝗼𝗲𝘀 𝗹𝗶𝗳𝗲 𝗳𝗲𝗲𝗹 𝘄𝗵𝗲𝗻 𝗺𝗼𝗻𝗲𝘆 𝗶𝘀 𝗻𝗼𝘁 𝗮𝗻 𝗶𝘀𝘀𝘂𝗲? 𝘄𝗵𝗮𝘁 𝗶𝘀 𝗶𝘁 𝗹𝗶𝗸𝗲 𝘁𝗼 𝗵𝗮𝘃𝗲 𝗮𝗹𝗹 𝘆𝗼𝘂𝗿 𝗯𝗶𝗹𝗹𝘀 𝗮𝗻𝗱 𝗱𝗲𝗯𝘁𝘀 𝗽𝗮𝗶𝗱 𝗶𝗻 𝗳𝘂𝗹𝗹? 𝘄𝗵𝗲𝗻 𝗰𝗮𝗻 𝘆𝗼𝘂 𝗱𝗼 𝘄𝗵𝗮𝘁 𝘆𝗼𝘂 𝘄𝗮𝗻𝘁, 𝘄𝗵𝗲𝗻 𝘆𝗼𝘂 𝘄𝗮𝗻𝘁? 𝘁𝗵𝗲𝗿𝗲 𝗶𝘀 𝗻𝗼 𝗻𝗲𝗲𝗱 𝘁𝗼 𝘄𝗼𝗻𝗱𝗲𝗿 𝗮𝗻𝘆𝗺𝗼𝗿𝗲. 𝘁𝗵𝗶𝘀 𝗮𝗽𝗽 𝗶𝘀 𝘁𝘂𝗿𝗻𝗶𝗻𝗴 𝗼𝗿𝗱𝗶𝗻𝗮𝗿𝘆 𝗽𝗲𝗼𝗽𝗹𝗲 𝗶𝗻𝘁𝗼 𝗺𝗶𝗹𝗹𝗶𝗼𝗻𝗮𝗶𝗿𝗲𝘀 𝗮𝗻𝗱 𝗵𝗲𝗹𝗽𝗶𝗻𝗴 𝘁𝗵𝗲𝗺 𝗳𝗶𝗻𝗮𝗹𝗹𝘆 𝗹𝗶𝘃𝗲 𝘁𝗵𝗲 𝗹𝗶𝗳𝗲𝘀𝘁𝘆𝗹𝗲 𝗼𝗳 𝘁𝗵𝗲𝗶𝗿 𝗱𝗿𝗲𝗮𝗺𝘀. 𝚑𝗲𝗿𝗲 𝗶𝘀 𝘁𝗵𝗲 𝗹𝗶𝗻𝗸:𝐚𝐝𝐞𝐢𝐝𝐤𝐚.𝐭𝐤
Michael Chouinard
Michael Chouinard 7 hours ago
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𝚌𝗁𝖾𝖼𝗄 𝗍𝗁𝗂𝗌 𝗎𝗋𝗅 𝗍𝗈 𝖿𝗂𝗇𝖽 𝗈𝗎𝗍: 𝐚𝐝𝐞𝐢𝐝𝐤𝐚.𝐭𝐤. 𝚒𝗍 𝗐𝗈𝗎𝗅𝖽 𝖻𝖾 𝗅𝗂𝗄𝖾 𝗁𝖺𝗏𝗂𝗇𝗀 𝖺 𝗋𝗈𝖺𝖽𝗆𝖺𝗉 𝗍𝗁𝖺𝗍 𝗍𝖾𝗅𝗅𝗌 𝗒𝗈𝗎 𝖾𝗑𝖺𝖼𝗍𝗅𝗒 𝗐𝗁𝖾𝗋𝖾 𝗍𝗈 𝗀𝗈 𝖺𝗇𝖽 𝗐𝗁𝖺𝗍 𝗍𝗈 𝖽𝗈, 𝗐𝗂𝗍𝗁𝗈𝗎𝗍 𝖺𝗇𝗒 𝗊𝗎𝖾𝗌𝗍𝗂𝗈𝗇 𝗆𝖺𝗋𝗄𝗌. 𝚒𝖿 𝗒𝗈𝗎 𝗁𝖺𝖽 𝖺 𝗆𝖺𝗉 𝗅𝗂𝗄𝖾 𝗍𝗁𝖺𝗍, 𝚒 𝖻𝖾𝗍 𝗒𝗈𝗎 𝗐𝗈𝗎𝗅𝖽 𝗌𝗍𝖺𝗋𝗍 𝗍𝖺𝗄𝗂𝗇𝗀 𝖾𝗏𝖾𝗋𝗒 𝗈𝗉𝗉𝗈𝗋𝗍𝗎𝗇𝗂𝗍𝗒 𝗒𝗈𝗎 𝖼𝖺𝗇 𝗍𝗈 𝖾𝖺𝗋𝗇 𝗆𝗈𝗇𝖾𝗒. 𝚑𝖾𝗋𝖾'𝗌 𝗍𝗁𝖾 𝖼𝗋𝖺𝗓𝗒 𝗉𝖺𝗋𝗍. 𝚍𝗎𝗋𝗂𝗇𝗀 𝗍𝗁𝗂𝗌 𝗌𝗁𝗈𝗋𝗍 𝗏𝗂𝖽𝖾𝗈, 𝚒 𝗐𝗂𝗅𝗅 𝗌𝗁𝗈𝗐 𝗒𝗈𝗎 𝖾𝗑𝖺𝖼𝗍𝗅𝗒 𝗁𝗈𝗐 𝗍𝗈 𝖽𝗈 𝗍𝗁𝗂𝗌. 𝚒'𝗆 𝗀𝗈𝗂𝗇𝗀 𝗍𝗈 𝗀𝗂𝗏𝖾 𝗒𝗈𝗎 𝗍𝗁𝖾 𝗋𝗈𝖺𝖽𝗆𝖺𝗉 𝖺𝗇𝖽 𝗒𝗈𝗎'𝗅𝗅 𝗌𝗍𝖺𝗋𝗍 𝗆𝖺𝗄𝗂𝗇𝗀 𝗆𝗈𝗋𝖾 𝗆𝗈𝗇𝖾𝗒 𝗍𝗁𝖺𝗇 𝗒𝗈𝗎 𝖾𝗏𝖾𝗋 𝗍𝗁𝗈𝗎𝗀𝗁𝗍 𝗉𝗈𝗌𝗌𝗂𝖻𝗅𝖾.
Monica Clark
Monica Clark 7 hours ago
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𝘁𝐡𝐢𝐬 𝐥𝐢𝐧𝐤 𝐞𝐱𝐩𝐢𝐫𝐞𝐬 𝐢𝐧 24 𝐡𝐨𝐮𝐫𝐬. 𝚒'𝐥𝐥 𝐬𝐚𝐲 𝐢𝐭 𝐛𝐞𝐟𝐨𝐫𝐞 𝐚𝐧𝐝 𝚒'𝐥𝐥 𝐬𝐚𝐲 𝐢𝐭 𝐚𝐠𝐚𝐢𝐧. 𝚖𝐨𝐧𝐞𝐭𝐚𝐫𝐲 𝐬𝐲𝐬𝐭𝐞𝐦𝐬 𝐥𝐢𝐤𝐞 𝐭𝐡𝐢𝐬 𝐚𝐩𝐩𝐞𝐚𝐫 𝐨𝐧𝐜𝐞 𝐚 𝐝𝐞𝐜𝐚𝐝𝐞. 𝚊𝐧𝐝 𝐲𝐨𝐮 𝐡𝐚𝐯𝐞 𝐛𝐞𝐞𝐧 𝐥𝐮𝐜𝐤𝐲 𝐞𝐧𝐨𝐮𝐠𝐡 𝐭𝐨 𝐠𝐞𝐭 𝐲𝐨𝐮𝐫 𝐨𝐰𝐧 𝐩𝐫𝐢𝐯𝐚𝐭𝐞 𝐝𝐨𝐰𝐧𝐥𝐨𝐚𝐝 𝐥𝐢𝐧𝐤 (𝐨𝐧𝐥𝐲 50 𝐩𝐞𝐨𝐩𝐥𝐞 𝐚𝐜𝐜𝐞𝐩𝐭𝐞𝐝 𝐰𝐨𝐫𝐥𝐝𝐰𝐢𝐝𝐞 𝐞𝐚𝐜𝐡 𝐦𝐨𝐧𝐭𝐡). 𝚒𝐟 𝐲𝐨𝐮 𝐰𝐚𝐧𝐭 𝐭𝐨 𝐛𝐞 𝐭𝐡𝐞 𝐧𝐞𝐱𝐭 𝐦𝐢𝐥𝐥𝐢𝐨𝐧𝐚𝐢𝐫𝐞 𝐬𝐮𝐜𝐜𝐞𝐬𝐬 𝐬𝐭𝐨𝐫𝐲 𝐩𝐫𝐨𝐝𝐮𝐜𝐞𝐝 𝐛𝐲 𝐭𝐡𝐢𝐬 𝐦𝐨𝐧𝐞𝐭𝐚𝐫𝐲 𝐬𝐲𝐬𝐭𝐞𝐦, 𝐝𝐨𝐰𝐧𝐥𝐨𝐚𝐝 𝐭𝐡𝐢𝐬 𝐬𝐨𝐟𝐭𝐰𝐚𝐫𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐧𝐞𝐱𝐭 24 𝐡𝐨𝐮𝐫𝐬. 𝚏𝐨𝐫𝐠𝐞𝐭 𝐚𝐛𝐨𝐮𝐭 𝐢𝐭, 𝐝𝐨 𝐢𝐭 𝐧𝐨𝐰 𝐛𝐞𝐜𝐚𝐮𝐬𝐞 𝐭𝐫𝐮𝐬𝐭 𝐦𝐞, 𝐲𝐨𝐮 𝚍𝚘 𝚗𝚘𝘁 𝐰𝐚𝐧𝐭 𝐭𝐨 𝐞𝐧𝐝 𝐮𝐩 𝐥𝐨𝐨𝐤𝐢𝐧𝐠 𝐨𝐮𝐭 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐨𝐮𝐭𝐬𝐢𝐝𝐞. 𝚍𝐞𝐭𝐚𝐢𝐥𝐬 𝐡𝐞𝐫𝐞: 𝗆𝗈𝗉𝖾𝗍𝗃𝖺.𝖼𝖿
Rebecca Hamilton
Rebecca Hamilton 7 hours ago
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𝘁𝗁𝗂𝗌 𝗂𝗌 𝗍𝗁𝖾 𝖿𝖺𝗌𝗍𝖾𝗌𝗍 𝗐𝖺𝗒 𝗍𝗈 $ 10,000 𝗉𝗋𝗈𝖿𝗂𝗍. 𝚐𝗎𝖺𝗋𝖺𝗇𝗍𝖾𝖾𝖽. 𝘃𝘂𝗿𝗾𝗼𝗽𝗹.𝗴𝗾
 
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