By Gina Lee
Investing.com – The dollar inched up on Wednesday morning in Asia but remained near multi-week lows as subdued U.S. bond yields also diminished the U.S. currency’s yield appeal.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.01% to 91.40 at 12:37 AM ET (4:37 AM GMT) but was at a seven-week low.
The USD/JPY pair inched up 0.01% to 108.09.
The AUD/USD pair edged down 0.16% to 0.7711 and the NZD/USD pair inched down 0.07% to 0.7168.
The USD/CNY pair inched up 0.02% to 6.4493 while the GBP/USD pair edged down 0.11% to 1.3920.
The dollar did get some support, however, as global shares pulled back from record highs as COVID-19 numbers continue to soar globally and put paid to expectations of a quick economic recovery.
The dollar index "has broken down through a key short-term support level at 91.30 and can see further downside to the low 90s," with the euro rising to around $1.22, Westpac analysts in a note.
"We were looking for the [index] to top in the third quarter when second derivative U.S. rebound measures crest and Europe gets her vax act together, but the early indications are that vaccinations across Europe are picking up pace already," the note added.
The euro traded at $1.2039, after climbing to a seven-week high of $1.2079 during the previous session. The European Union’s procurement of an additional 100 million doses of the COVID-19 vaccine produced by BioNTech SE (F:22UAy) and Pfizer Inc. (NYSE:PFE) also lent support to the single currency.
The European Central Bank is also due to hand down its policy decision on Thursday.
Investors’ flight to safety also boosted the yen, another safe-haven currency, and the Japanese currency climbed to a seven-week high against the dollar.
The benchmark 10-year Treasury yield hovered around the 1.56% mark and near its lowest level since mid-March 2021, continuing its consolidation following its retreat from a 14-month high at the end of March. Mounting evidence that the U.S. Federal Reserve will be slower in tightening monetary policy than it had appeared to the market have led to declines in U.S. yields and the dollar in April, according to some investors.
Meanwhile, surging COVID-19 numbers globally also triggered investor caution. India reported 1,761 deaths from COVID-19, a record daily toll, and there were more than 142.5 million COVID-19 cases as of Apr. 21, according to Johns Hopkins University data.
In cryptocurrencies, bitcoin was near the $56,000 mark, consolidating after it fell to as low as $51,541.16 on Sunday and after setting a record high at $64,895.22 on Apr. 14.