Dollar Dips as Stocks Pop
APRIL 08, 2021
The U.S. dollar is under pressure against most of its major counterparts, save the British pound.
Risk sentiment is in the green again today, boosted by yesterday’s commitment from the Federal Reserve to keep policy accommodative. The S&P looks to build on its record level at the open, following the uptick in the Euro Stoxx 600 Index which is also likely to close at a record high.
Slightly disappointing jobless claims have yet to dent the positive sentiment. Continuing claims rose 16K to 744K last week. The print is higher than the 680K that was estimated by economists. On the bright side, continuing claims edged marginally lower.
With weekly jobless claims the only piece of economic data on today’s slate, traders may shift attention back to the Federal Reserve. James Bullard and Neel Kashkari will speak later today but the headline will be Jerome Powell’s appearance in front of the IMF at noon today.
What to Watch Today…
- Jerome Powell on a Panel at Noon
The Australian and New Zealand dollars were the biggest winners overnight, both gaining nearly half a percent against its American counterpart. The higher-yielding currencies are finding support on wide-spread global “risk-on” trading.
Not all of the commodity-based currencies are up this morning, however. Both the Canadian dollar and the Norwegian krone have underperformed as the price of WTI and Brent dipped.
The British pound took a big dip overnight but has since recovered most of its losses. The sterling came under earlier pressure amidst new questions about the nation’s vaccine rollout. The United Kingdom limited the use of the AstraZeneca vaccine for young adults, joining other European nations and Canada. Despite the recovery this morning, GBP/USD is down a full percent from Monday’s close. Further sterling losses could be in the cards as the U.K. may be unable to keep outpacing its European counterparts on the vaccine rollout front.