Dollar Weakens; Concerns Over Fed Tapering Ease
Investing.com
Published May 21, 2021 03:02AM ET
By Peter Nurse
Investing.com - The dollar traded lower in early European trade Friday, heading for a weekly loss as concerns eased over Federal Reserve members discussing potentially tapering back bond buying.
At 3 AM ET (0800 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 89.737, down about 0.6% for the week so far.
EUR/USD traded 0.1% higher at 1.2237, not far below the four-month high of 1.2245 it hit earlier in the week, USD/JPY was 0.1% lower at 108.71, while the risk-sensitive AUD/USD was down 0.2% at 0.7756.
The dollar has given back a bounce it made after a mention of possible future tapering discussions, in minutes from the Fed's April meeting, prompted fears of early rate rises.
“News from the FOMC minutes that a number of participants felt that tapering of asset purchases might be discussed at upcoming meetings could have given the dollar a big boost,” said analysts at ING, in a note. “The fact that it hasn't probably owes to the fact that progress towards the Fed goals is still ongoing and that the first Fed rate hike would still be a 2023 story.”
Data released on Thursday showed that U.S. initial jobless claims fell to 444,000 over the past week, a new post-pandemic low, adding to evidence of a steady recovery in the labor market.
That said, the number of continuing claims, which are measured with a one-week time lag to initial ones, rose by over 100,000, suggesting the recovery still has some way to go.
Elsewhere, GBP/USD fell 0.1% to 1.4182, just short of multi-year highs, after British retail sales surged by 9.2% in April, when non-essential shops reopened after months of closure due to Covid restrictions, their biggest jump since a previous reopening in June.
Sterling is heading for a third consecutive weekly gain and has climbed 2.6% during May so far.
USD/ZAR is up 0.1% at 13.979 after South Africa’s central bank held its benchmark interest rate for a fifth straight meeting on Thursday, looking through a temporary pickup in inflation as the country faces a resurgence in coronavirus infections.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.