14 hours ago
LONDON – Reuters: The dollar rose broadly on Monday, with higher US Treasury yields and expectations of more fiscal stimulus, which pushed the greenback to rise against its rivals, while the euro fell to its lowest level in two weeks.
US President Joe Biden, who takes office on January 20 with the Democrats controlling both houses of Congress, has promised to spend “trillions” on additional aid to relieve the pandemic.
Usually, additional spending plans cause investors to worry about rising inflation and its damaging effect on the US dollar as the economy weakens. But the green card has found support in recent weeks, thanks to higher US bond yields.
“It is not surprising that the recent acceleration in yields reminds the American reality of foreign exchange markets to end the focus on inflation and to assume a more comprehensive approach to valuing the dollar,” said experts at German Commerzbank in a note.
The euro fell to $ 1.2167, its lowest level since December 25, after rising to $ 1.2349 last week.
The nominal yield of the US benchmark 10-year bond is higher by more than 20 basis points (0.2%) to 1.1187% this year, which helped the dollar rise to its highest level in a month at 104.20 against the Japanese yen.
The dollar index has lost about 12 percent since it reached a three-year peak in March, but it is more than 1.3 percent higher than the nearly three-year low it hit last week. Yesterday, the index rose 0.1 percent to 90.418.
The Australian dollar fell almost 1 percent to $ 0.7693, as it was unaffected by the strong performance of domestic retail sales for another month.
The US dollar also rose 0.2 percent to 6.4864 yuan after weak factory gate delivery rates in China.
The British pound was hit by the dollar’s recovery, falling below the $ 1.35 level for the first time this year, while the British government’s top medical advisor warned that the next few weeks of the Covid-19 pandemic will be the worst yet.
The sterling fell 0.58 percent to 1.3484 dollars by 1600 GMT. The previous time the British currency fell below $ 1.35 was on the 30th of December.
The sterling settled against the European currency at 90.06 pence per euro.
On the other hand, Bitcoin fell more than 19 percent to its lowest level in a week yesterday, which puts the cryptocurrency on the path of its biggest decline in one day since March.
Bitcoin fell to $ 30,699, its lowest level since the fifth of January, before recovering to $ 32,885 by 1535 GMT, but it remains down more than 16 percent throughout the day. If this continues, this daily drop will be the largest since the Covid-19 pandemic caused chaos in financial markets last March.
The decline of the world’s largest cryptocurrency came with the rise of the dollar against other major fiat currencies, coinciding with the possibility of a rise in US interest rates.
Ethereum, the second largest cryptocurrency that often moves in parallel with Bitcoin, fell 23 percent to $ 985, its lowest level in a week.