Dollar Hit Record Highs After Biden Spoke About Job Plan

The U.S. dollar continued its rally on Thursday supported by a $2 trillion U.S. government spending plan. The currency is holding near multi-month highs. The dollar index soared to 93.286 in early trades in Europe, remaining close to a five-month high of 93.439 reached on Wednesday.

Overall, the greenback surged forward by 3.57% against the six major currencies basket during the first quarter of 2021. That is the currency’s best quarterly performance since 2018, with traders betting on a fast and robust economic recovery.

Meanwhile, a new lockdown in France pushed the euro lower. The common currency suffered from concerns about the euro zone’s economic recovery as the third wave of COVID-19 infections threatens Europe.

After the virus cases surged again, President Emmanuel Macron had to order France into its third national lockdown. He declared that schools would close for three weeks. Commerzbank analyst Antje Praefcke noted that as long as the recovery on either side of the Atlantic is more or less unbalanced, there is not much to be said in support of the common currency.

The euro traded at $1.1720 after plunging to a near five-month low of $1.1704. Against the British pound, it climbed up by 0.08% after tumbling to a 13-month low of 0.85025 pounds.

The U.S. Dollar Remained Firm Against the Japanese Yen

U.S. President Joe Biden spoke about his $2 trillion-plus job plan, which includes $621 billion for rebuilding the infrastructure. Supported by Biden’s announcement, the U.S. currency was firm against the Japanese yen. It ended March with its biggest monthly gains since November 2016. The greenback traded at 110.77 yen after soaring to as much as 110.97, its highest level in a year.

On the other hand, the Australian dollar plummeted down by 0.67% to $0.7542. The offshore Chinese yuan also lowered by 0.3% to 6.582 to the dollar. In March, the new data showed that China’s factory activity expanded at the slowest pace in nearly a year, causing the currency’s decline.