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

Dollar Weakens Ahead of Fed Meeting; Risk Sentiment Climbs

ForexApr 26, 2021 03:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

By Peter Nurse

Investing.com - The dollar weakened in early European trading Monday, with risk sentiment on the rise as economic data point to a global economic recovery ahead of this week’s Federal Reserve meeting.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was 0.1% lower at 90.778, near levels not seen since the end of February. 

USD/JPY was 0.1% lower at 107.81, EUR/USD traded up 0.1% at 1.2100, near a two-month high, GBP/USD gained 0.3% to 1.3914, while the risk-sensitive AUD/USD rose 0.3% to 0.7769.

Risk appetite has been boosted of late by strong signs of a global economic improvement, to the detriment of the safe haven dollar, with early April manufacturing activity indicators, released late last week, hitting record highs in the United States and also showing impressive improvement in Europe.

A survey from Germany's Ifo institute due later on Monday is expected to show business conditions continued to improve in Europe's largest economy.

Attention this week will be centered around the latest policy-setting meeting of the Federal Reserve, with the two-day get together scheduled to finish on Wednesday.

The European Central Bank maintained its very accommodative policies last week, with President Christine Lagarde shutting down expectations that the central bank will start to consider easing back its bond purchases any time soon.

Federal Reserve Chairman Jerome Powell is likely to face questions over whether an improving labor market and rising coronavirus vaccinations warrant a withdrawal of monetary easing, but he is likely to take a very similar stance to Lagarde, shunning talk of tapering bond purchases.

“The Fed is unlikely to rock the tapering boat on Wednesday,” said analysts at Nordea, in a note, but “we keep leaning towards higher USD rates, a stronger USD and negative spill-overs to risk assets during Q3. We think a decision on tapering will be taken in September and keep looking for a rate hike from the Fed already in H1-2022.”

Elsewhere, USD/TRY gained 0.9% to 8.4471, with traders keeping a wary eye on the Turkish lira to see if this pair will test its all-time high of 8.58 amid deteriorating relations with the United States, and after the new central bank chief signaled that rate hikes would harm the economy.

The lira has slipped 3.5% in the last three trading days amid reports that U.S. President Joe Biden will recognize the 1915 massacres of Armenians in the Ottoman Empire as a genocide, something that would strain the relationship between the NATO allies.

USD/RUB fell 0.3% to 74.794, as Russia de-escalates the tension on the border with Ukraine and after the country’s central bank hiked its key interest rate to 5% Friday, from 4.5%, in an attempt to stem accelerating inflation.

Dollar Weakens Ahead of Fed Meeting; Risk Sentiment Climbs
 

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 (1)
CAPTAIN CASH
CAPTAIN CASH Apr 26, 2021 4:18AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
good
 
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