U.S. Dollar Advance On Rising Treasury Yields
March 18 2021 - 02:45AM
RTTF2
The U.S. dollar was higher against its major counterparts in the
European session on Thursday, as U.S. Treasury yields rose after
the Federal Reserve lifted expectations for GDP growth and
inflation. partly driven by fiscal stimulus and the rollout of
vaccines.
At the end of a two-day policy meeting on Wednesday, the Fed
indicated that it won't raise interest rates at least through
2023.
Powell said that current monetary policy stance is appropriate
and there is no need to react to a surge in Treasury yields.
The economy is expected to grow by 6.5 percent this year, up
from 4.2 percent rise estimated in December.
Inflation is seen at 2.4 percent this year, well above the Fed's
2 percent target.
The Fed signaled that it is willing to let the economy run hot
to fuel recovery from the pandemic.
The greenback climbed to 1.1935 against the euro and 109.30
against the yen, after falling to 6-day lows of 1.1989 and 108.62,
respectively in early deals. The next possible resistance for the
greenback is seen around 1.16 against the euro and 112.00 against
the yen.
The greenback recovered to 0.7221 against the kiwi, 1.2418
against the loonie and 0.7795 against the aussie, off its early
2-week low of 0.7269, more than 3-year low of 1.2365 and near a
3-week low of 0.7849, respectively. The greenback is seen finding
resistance around 0.70 against the kiwi, 1.27 against the loonie
and 0.75 against the aussie.
Reversing from its early low of 0.9219 against the franc and a
6-day low of 1.4001 against the pound, the greenback bounced off to
0.9271 and 1.3945, respectively. On the upside, 0.94 and 1.37 are
likely seen as its next resistance levels against the franc and the
pound, respectively.
Looking ahead, the Bank of England's monetary policy
announcement is due at 8:00 am ET. The Monetary Policy Committee is
widely expected to hold the key rate at a record low of 0.10
percent and the quantitative easing programme at GBP 875
billion.
Canada new housing price index for February and U.S. weekly
jobless claims for the week ended March 13 are scheduled for
release in the New York session.
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