US dollar continues to trade lower against peers

US dollar continues to trade lower against peers

The US dollar continues its downward trend as we head into the weekend. Concern over the US central bank tapering has subsided and resulted in a softer dollar. Positive news out of the UK and eurozone has supported both EUR and GBP. Oil prices are trading higher, which has USD/CAD near the six-year lows seen earlier this week.

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    May 21, 2021

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    The dollar slipped further against its peers as investors move away from concerns about inflation and tapering action from the Federal Reserve. The Bloomberg Dollar Index is holding near its lows of the week.


    Sterling traded to a 3-month high, reaching $1.4234 earlier in the trading session. Data out of the UK showed that May composite PMI beat expectations, which supported the country’s currency.


    EUR/USD hit a high of $1.2240 earlier in the trading session before retreating back towards the 1.22 handle. A broadly softer dollar, fewer new Covid cases and positive vaccine news have been supportive of the common currency. PMI data out of the eurozone released on Friday signaled an improving economic outlook for the region.

    USD/CAD fell back to six-year lows seen earlier this week following a rebound in oil prices, which strengthened 1.5% after 3 days of declines. The Canadian dollar is also supported by the country's successful vaccination roll-outs.

    Lower iron ore prices put downward pressure on AUD/USD. 

    USD/JPY was trading higher despite a slightly flatter US yield curve, but the currency pair has since erased earlier gains and is trading slightly lower.

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Cate Camerota
Cate Camerota

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