Dollar reflects higher as traders support inflation data by Reuters

By Tommy Wilkes

LONDON (Reuters) – The dollar gained ground on Monday after falling last week as traders forecast the outlook for treasury yields while awaiting key US inflation and retail sales data in the coming days.

Elsewhere, it was a quiet start to a data-heavy week for foreign exchange markets.

The euro fell below $ 1.19, while the British pound briefly fell to a two-month low, with some analysts clearing blood clots over AstraZeneca (NASDAQ :)’s COVID-19 vaccine, on which the UK relied heavily has for its aggressive vaccination program.

The happiness of the dollar has been linked to the performance of treasury yields for most of 2021, after concerns about rising inflation in the United States and a stimulating economic boom in February significantly boosted yields on US government bonds caused.

A drop in U.S. yields last week caused the worst week for the dollar in 2021, but the currency found some stability on Monday.

Federal Reserve Chairman Jerome Powell announced in a US media interview on Sunday that the US economy is at a “turning point” and that it looks set for a strong rebound in the coming months, but he also warned about the risks posed by a rapid reopening.

Investors are now waiting for US inflation data to be available on Tuesday.

‘We will see the first evidence of the much-anticipated inflation surge generally expected in the coming months, as the base effects from a year ago come into effect, as the sharp declines after COVID begin to fall out in the annual calculations. , “said MUFG analysts.

They said the dollar’s prosperity could very well “remain linked to ten-year returns”.

The benchmark was at 1.6462% after falling to as low as 1.6170% last week. It rose on March 30 to a high of more than a year of 1.7760%.

The one, which measures the greenback against a currency basket, rose 0.1% to 92.275, while the euro fell 0.2% to $ 1.1875.

traded more than $ 60,000, lowering the gap to its record high.

Against the pound, the dollar initially rose before reversing. The British currency last rose 0.2% to $ 1.3734 after hitting a two-month low of $ 1.3669.

The dollar fell 0.2% to 109.41 yen against the Japanese currency.

“USD has some upside potential this week,” Commonwealth Bank of Australia (OTC 🙂 strategist Kimberley Mundy wrote in a report.

“Strong US economic data will highlight the discrepancy between the rapid economic recovery of the US and the more hampered recovery in other developed economies.”

The dollar could return to 110 yen, while the euro has the chance to track most of the recent gains from its nearly five-month low near $ 1.17, she said.