© Reuters. FILE PHOTO: Shown in this illustration is a US dollar and five British pounds taken on May 7, 2021. REUTERS/Dado Rovich/Illustration
By Gertrude Chavez-Dreyfus
NEW YORK (Reuters) – The safe-haven dollar slipped on Wednesday from more than three-month highs as risk appetite returned as stocks rose, although investors remained cautious amid inflation concerns and concerns about the highly contagious coronavirus variant.
The Japanese yen also fell against the dollar as another safe haven, as risk aversion subsided.
The delta type of coronavirus, which has caused an increase in the number of infections worldwide, rose to the top of investor fears along with inflation this week, sending global stocks sharply lower on Monday. Although European stock markets rebounded on Wednesday, Wall Street stocks also rose.
In New York afternoon trading, a measure of its value against six major currencies fell 0.2% to 92,755. On Tuesday, the index hit its highest level in more than three months.
Although market participants remained optimistic about the dollar’s outlook, at least for the next few months.
“Between yield spreads and the coronavirus-driven safe haven demand, the US dollar has been the ideal in the forex ball this week,” said Matt Wheeler, global head of market research at FOREX.com and City Index.
He added, “These issues should continue to support the dollar in the coming weeks, but a recovery in risk appetite in the market, especially if driven by additional monetary or fiscal stimulus from the United States, would undermine the emerging trend of strength in the dollar.” .
The Fed’s stimulus measures or quantitative easing have constrained the dollar as the supply of currency in the financial system has increased.
Joe Manimbo, chief market analyst at Western Union (NYSE: Business Solutions in Washington, a positive dollar scenario.
Against the yen, the dollar rose 0.4% to 110.26.
The Australian dollar, seen as a liquid proxy for risk appetite, fell to its lowest since November before recovering somewhat. It last rose 0.4% to $0.7357, while the New Zealand dollar rose 0.9% to $0.6976.
Australia’s two largest states reported sharp increases in new cases of COVID-19 on Wednesday, in a blow to hopes of lifting lockdown restrictions as more than half of the country’s population is under stay-at-home orders.
The British pound, which hit its lowest level since February on Tuesday, rose 0.6 percent to $1.3715.
Analysts pointed to a confrontation between Britain and the European Union. Prime Minister Boris Johnson said his government will set out its approach on the Northern Ireland Protocol to the British Parliament on Wednesday. And cases of Covid-19 in Britain are on the rise. [nL1N2OW18W.
The euro rose 0.2% versus the dollar to $1.1797.
Currency markets are looking ahead to the European Central Bank’s (ECB) meeting on Thursday. A dovish tone is expected after ECB President Christine Lagarde foreshadowed a guidance tweak in an interview last week.
In cryptocurrencies, bitcoin rose back above $30,000, having dipped below this key level for the first time in a month on Tuesday. It last traded up 7.4% at $31,991, while ether surged more than 10% to $1,971.79.92.
Currency bid prices at 2:56PM (1856 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Dollar index 92.7500 92.9650 -0.22% 3.077% +93.1940 +92.7470
Euro/Dollar $1.1799 $1.1781 +0.15% -3.43% +$1.1804 +$1.1752
Dollar/Yen 110.2600 109.8700 +0.36% +6.72% +110.3850 +109.8000
Euro/Yen 130.09 129.41 +0.53% +2.50% +130.1500 +129.1700
Dollar/Swiss 0.9174 0.9213 -0.41% +3.70% +0.9231 +0.9175
Sterling/Dollar $1.3715 $1.3628 +0.64% +0.39% +$1.3721 +$1.3593
Dollar/Canadian 1.2559 1.2680 -0.95% -1.37% +1.2729 +1.2526
Aussie/Dollar $0.7357 $0.7329 +0.40% -4.35% +$0.7360 +$0.7290
Euro/Swiss 1.0825 1.0851 -0.24% +0.17% +1.0857 +1.0825
Euro/Sterling 0.8602 0.8641 -0.45% -3.75% +0.8658 +0.8600
NZ $0.6972 $0.6917 +0.87% -2.84% +$0.6977 +$0.6894
Dollar/Norway 8.8720 9.0000 -1.39% +3.35% +9.0540 +8.8750
Euro/Norway 10.4693 10.6107 -1.33% +0.02% +10.6478 +10.4680
Dollar/Sweden 8.6834 8.6878 -0.03% +5.94% +8.7334 +8.6836
Euro/Sweden 10.2459 10.2494 -0.03% +1.68% +10.2656 +10.2318