The euro fought to join a broader risk rally against the dollar on Wednesday. Analysts stated the risk of extended lockdowns in Europe to combat the spread of coronavirus. The continent’s delay in a vaccine rollout was declining the currency.
Down 0.1% versus the greenback at $1.2117 by 1130 GMT, Europe’s shared currency had only the safe-haven Swiss franc and Sweden’s crown for the company to resist a broad rally against the dollar by the G-10 group of currencies.
Sterling hit $1.3720, a two and a half year high, and 88.38 pence, its highest since May 2020 versus the euro. Valentin Marinov, head of G10 FX research at Credit Agricole, announced that it contributes to euro weakness.
The risk-sensitive Australian dollar increased by 0.4% and settled at $0.7727. The New Zealand dollar, also a commodity currency like the Aussie, boosted by 0.25% to $0.7133.
Significantly, an index that measures the dollar’s strength against a basket of other currencies was up almost 0.1% at 90.510. The euro forms approximately 60% of the dollar index by weight.
Moreover, it also declined by 0.1% versus the Japanese yen to 103.81 yen per dollar.
Although the U.S. dollar has perked up in recent weeks on the back of an increase in U.S. Treasury yields, investors still expect the currency to weaken.
Ebrahim Rahbari expects a dollars downtrend
FX strategist at CitiFX, Ebrahim Rahbari, remains bearish U.S. dollar and expect the downtrend to resume.
Positioning data reveals that investors are overwhelmingly short dollars. They figure that budget and current account deficits will decline the American currency.
UBS Global Wealth Management’s chief investment officer Mark Haefele restated a bearish view on the greenback. He stated that pro-cyclical currencies, for example, the euro, commodity-producer currencies, and the sterling, would benefit from economic rebound helped by vaccine rollouts.
The world’s largest cryptocurrency, Bitcoin, decreased by 4% and traded at $34,468.
The safe-haven yen slid past 104 per dollar and fell against other major currencies. It last traded at 103.84 per dollar.
The British pound found support from the Bank of England’s chief economist’s forecast that Britain’s economy starts to improve in the second half of 2021 and extended overnight increases to $1.3649.
The rupee increased by 11 paise to 73.17 against the U.S. dollar on Tuesday on the back of a rally in domestic equities and a weak dollar.
Furthermore, at the interbank forex market, the rupee opened at 73.16 and touched an intra-day high of 73.14 and a low of 73.31. The rupee closed at 73.17, higher by 11 paise over its last close.