Dollar Decline Accelerates to Start Week
APRIL 19, 2021
After slowly losing for much of last week, the U.S. dollar’s decline picked up momentum at the start of the week.
The Bloomberg Dollar Spot Index dropped half a percent to a March 13th low with the greenback under pressure across the board. There is no clear reason for the dollar’s downturn. Global equities are in the green which would account for some of the greenback’s sell-off.
Outside headlines surrounding Russian-US tensions (discussed below), news flow has been slow.
Earnings season will continue this week with the companies reporting so far recording “blowout” results. The Federal Reserve is in their traditional media “blackout” before their interest rate decision next Wednesday. After a busy week last week, the economic docket is fairly light. The U.S. will release manufacturing and service purchasing managers indexes on Friday.
What to Watch Today…
- No major economic events scheduled for today, but NASA will fly their helicopter on Mars at 1 p.m.
The Euro popped half a percent higher and finally broke the technical level we droned on about all of last week. EUR/USD is now at its highest level since the beginning of March. Much of the Euro’s momentum comes as a result of more good news on the vaccine front. Pfizer and BioNTech will supply the European Union with 100 million more doses this year.
European recovery and the outlook for vaccines have dictated EUR/USD traded with the pair rising almost 1.5% since last Monday. The European economic docket is sparse this week but the European Central Bank will meet on Thursday.
The safe-haven Japanese yen gained across the board, including a seven-tenth of a percent gain versus its American rival. The safe-haven has found support on increased tensions between the United States and Russia. After a series of tough talks and sanctions this month, the Biden administration warned of “consequences” if opposition leader Alexey Navalny dies. Navalny’s health is failing as he enters his third week of a hunger strike while in a Russian prison.
USD/JPY is at the lowest level since March 5th.