U.S. Dollar Advances Amid Virus, Fed Policy Worries
June 28 2021 - 11:51PM
RTTF2
The U.S. dollar was higher against its major counterparts in the
Asian session on Tuesday, as the spread of the Delta variant of
Covid-19 triggered fears about the pace of economic recovery, while
hawkish remarks from the U.S. Federal Reserve policy makers
supported prospects of a tightening of monetary policy sooner
rather later.
Concerns prevailed over the imposition of tougher restrictions
in countries such as Australia, Malaysia and Thailand. Indonesia is
considering imposing stricter restrictions starting Wednesday amid
surging infections.
Investors await U.S. jobs report due on Friday to determine the
pace of improvement in the labor market. Other key economic data
due this week include pending home sales, ADP private sector
payrolls, jobless claims and ISM manufacturing activity.
Richmond Fed President Thomas Barkin said on Monday that the
central bank has made "substantial further progress" toward its
inflation goal so as to begin the withdrawal of stimulus.
Barkin added that he would decide next year whether the U.S.
central bank had reached its inflation and employment goals to
justify a rate hike.
The greenback spiked higher to a 1-week high of 1.2349 against
the loonie, 6-day highs of 0.7023 against the kiwi and 0.7549
against the aussie, after falling to 1.2329, 0.7051 and 0.7571,
respectively in early deals. The greenback may find resistance
around 1.25 against the loonie, 0.68 against the kiwi and 0.72
against the aussie.
Reversing from its early lows of 0.9191 against the franc and
1.1930 against the euro, the greenback edged higher to 0.9207 and
1.1908, respectively. If the greenback rises further, 0.94 and 1.17
are likely seen as its next resistance levels against the franc and
the euro, respectively.
The greenback hit an 8-day high of 1.3859 against the pound,
from an early low of 1.3884, and held steady afterwards. The
greenback is seen facing resistance around the 1.36 level.
The greenback rebounded to 110.69 against the yen, after a fall
to a 1-week low of 110.45 at 9 pm ET. The greenback may locate
resistance around the 112 level.
Looking ahead, U.K. mortgage approvals for May and Eurozone
economic confidence index for June are due in the European
session.
At 8:00 am ET, German preliminary CPI for June is scheduled for
release.
U.S. consumer confidence index for June, FHFA's house price
index and S&P/Case-Shiller home price index for April will be
out in the New York session.
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