Dollar gets bid as investors await resolution on Suez blockage, 7-yr Treasury auction and EU vaccine distribution
The dollar is stronger as markets watch today's sale of 7-yr US Treasury bonds. The last time the Treasury sold 7-yr bonds the auction was weak and began a sell-off in overall longer-dated Treasuries. The pound and euro are both weaker as EU leadership meets today to discuss Covid vaccine shortages. A massive container ship continues to block the Suez Canal hindering global trade in oil and other goods.
March 25, 2021
EUR/USD 1.1810 GBP/USD 1.3719 USD/CAD 1.2585 AUD/USD 0.7596 USD/JPY 109.12 USD/CNH 6.5426 USD/ILS 3.3140 USD/MXN 20.8555 USD/CHF 0.9356 USD/INR 72.6263 USD/BRL 5.6483 USD/SGD 1.3466 USD/DKK 6.2972 USD/SEK 8.6280 USD/NOK 8.6087
The dollar is strengthening for the fifth day out of six as investors favor safer assets. Initial jobless claims came in this morning at 684K which is better than the 730K expected.
Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell seemed to balance their positive view on the economy during congressional testimony over the past two days. They suggested the recovery is strong, but that the US still has a long way to go before full recovery is assured.GBP
GBP/USD currently sits at the 1.37 level down 1.25% this week. The pound has essentially given back some of the gains from earlier in the year when investors saw the UK economy rebounding faster than most economies. Up until recently, the UK vaccine roll out was seen as further ahead; Now a vaccine shortage may limit the fast pace of vaccinations in the UK and slow the return to pre-Covid economic activity.EUR
The euro has fallen below 1.18 on overall US dollar strength. EU leaders meet virtually today to discuss an action plan to boost vaccine supplies and rollout across the bloc. The EU has been slower to vaccinate than the UK blaming AstraZeneca for not delivering the promised doses.
Eurozone data impressed providing some positive news for the bloc that seems to be entering a third wave of infections. Markit Services/ Manufacturing/ Composite PMIs all beat expectations.CADThe Canadian dollar lost ground and is headed toward 1.26 as the price of oil resumed its selloff after yesterday’s rally. Concerns about demand outweighed any oil shortage stemming from the blockage of the Suez Canal – WTI fell below $60 after climbing 5% on Wednesday.ASIA/PACIFIC
The Japanese yen weakened for a second day as Japanese investors sold yen to buy US dollar denominated Treasuries. The yen may break above the 109.11 level set earlier this month and head toward 1.10 if US dollar buying continues.
The Australian dollar is weaker again today and has fallen 4% since Feb. 24. Weaker oil prices and overall US dollar bullishness have contributed to a sell-off in the once surging Aussie.
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