Dollar is down, but headed for best weekly gain in three months on recovery hopes By Investing.com

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© Reuters.

By Gina Lee Investing.com – The dollar was down in Asia on Friday morning, but was still heading towards its best weekly gain in three months on rising confidence in the US economic recovery from COVID-19. The one that tracks the dollar against a basket of other currencies fell 0.05% to 91.507 at 8:39 pm ET (1:39 am GMT). The pair was down 0.03% to 105.50. The pair was down 0.05% to 0.7595, while the pair was up 0.03% to 0.7155. The pair was down 0.04% to 6.4691. The pair was up 0.11% to 1.3685. It kept its February interest rate at 0.10% when it issued its policy decision on Thursday. The index held close to a two-month high reached during the previous session, driven by positive employment figures. Thursday’s data revealed that 779,000 claims were filed in the past week, less than the 830,000 claims predicted in the forecasts produced by Investing.com and the 812,000 claims reported in the previous week. More job data, including, will be delivered later in the day. “The US economy is exceptionally strong relative to other countries, leading to a short dollar hedge,” JP Morgan‘s head of market research for Japan, Tohru Sasaki, told Reuters, pointing to employment and manufacturing indicators. , as well as the pace of COVID-19 vaccines. Although Sasaki expects the current outbreak of dollar strength to continue for “several weeks,” questions remain as to whether the strength will remain as other regions such as Europe and Asia vaccinate their populations against COVID-19. The US Federal Reserve is also continuing its ultra-easy monetary policy, which limits an increase in long-term US yields. Increases in long-term U.S. Treasury yields, as expectations for massive U.S. stimulus packages rise, have also given the dollar a boost. prepare for a marathon “vote-a-branch” session aimed at passing President Joe Biden‘s $ 19 trillion stimulus package. Although the dollar index is forecast for a 1.1% weekly advance, the most since November 1, some investors are considering whether the strength of the dollar so far in 2021 is a temporary position adjustment after the index fell 7% in 2020, or a longer-term move away from dollar pessimism. shorts to cover up. In particular, the yen has seen hedge funds rack up their biggest bearish bets since 2016. Westpac analysts forecast that vaccine launch in Europe will accelerate by the end of the first quarter, which, in addition to the Fed’s commitment to a ultra-flexible monetary policy could put pressure on the dollar. “The upside potential of the dollar index is living on borrowed time,” they said in a note. His advice? “Sell the dollar index at 92.”

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