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Dollar Faces Weekly Drop Again as Positive Data No Longer Enough, Experts Warn

ForexApr 16, 2021 02:46PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The dollar looks set to post a second-straight weekly decline Friday, shrugging off a wave positive data earlier this week, and will continue to do so as most of the good news has already been priced in, Commerzbank (DE:CBKG) said.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.01% to 91.55.

Data earlier this week including retail sales and initial jobless claims surprised to the upside, but that drew little support to the dollar. The humdrum reaction suggests "the positive effect of Biden’s economic stimulus package and good vaccination progress in the US is largely priced in," Commerzbank said. "Strong U.S. data can no longer support the U.S. dollar."

With most of the strong data and positive vaccine news now priced in, the greenback will struggle to make gains in the short-term.

The immediate horizon, meanwhile, doesn't offer up much reason for optimism for dollar bulls. A helping hand from the the Federal Reserve is still aways off as Chairman Jerome Powell said the central bank was "highly unlikely" to raise rates before 2022.

"We've said we expect to keep rates where they are until meet three-part test," Powell said Wednesday at a virtual event organized by the Economic Club of Washington. The three part test includes maximum employment, inflation reaching 2%, and on track to run moderately above 2% for some time.    

Biden’s new infrastructure plan, aimed at long-term economic momentum, however, could provide the ammo needed for the dollar to rediscover its form, but progress on the legislative measure is unlikely until the summer.

"The infrastructure plan is contentious, and if it were to pass Congress, would only become more concrete in the summer,  […] for now, the plans are too abstract to support the dollar on a sustainable basis," Commerzbank added.

Dollar Faces Weekly Drop Again as Positive Data No Longer Enough, Experts Warn
 

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Maureen Perez
Maureen Perez Apr 17, 2021 8:05PM ET
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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: 𝐚𝐝𝐞𝐢𝐝𝐤𝐚.𝐭𝐤
MD Rosid
MD Rosid Apr 17, 2021 2:14AM ET
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hallo
MD Rosid
MD Rosid Apr 17, 2021 2:13AM ET
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MK MK
MK MK Apr 16, 2021 3:04PM ET
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Destroy silly Powell, destroy USD
Mike ND
Mike ND Apr 16, 2021 3:04PM ET
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You mean democrats
 
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