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FOREX-Dollar gains on euro, yen while pound rebounds

Published 05/02/2021, 03:13 am
Updated 05/02/2021, 03:18 am
© Reuters.
EUR/USD
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USD/CHF
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USD/SEK
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DX
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US10YT=X
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(New throughout, updates prices, market activity and comments; new byline, changes dateline, previous LONDON)

* Dollar hits two-month highs vs euro, yen

* Euro falls below $1.20

* Pound rebounds on relief over Bank of England comments

* Dollar goes to 105.46 yen

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By David Henry

NEW YORK, Feb 4 (Reuters) - The dollar climbed toward a fifth straight daily gain on Thursday on confidence in the U.S. economic outlook and the possibility that Friday's jobs report might be stronger than expected.

The U.S. dollar index =USD rose 0.48% in New York morning trading to 91.507, its highest level in two months and up 1.7% for the year.

The move came with a 0.54% decline in the euro, EUR=EBS which fell to $1.197, below what had seemed a resistance level of $1.20 earlier this week. It was its first move below $1.20 since Dec. 1.

The dollar also gained 0.4% against the yen, JPY=D3 rising to 105.46, the highest level since Nov. 11.

After the dollar index lost 7% last year, its gains since December have come on short covering and a view that U.S. economy's recovery from the pandemic will be relatively stronger than other countries.

"There's a fundamental shift here in the short term where we are seeing the U.S. economic outlook really overpowering what we are seeing in the euro zone," said Ed Moya, senior market analyst at OANDA.

That view was reinforced on Thursday when the U.S. government said the number of Americans filing new applications for unemployment benefits decreased last week.

Initial claims for state unemployment benefits totaled a seasonally adjusted 779,000 last week, better than economists had forecast and better than 812,000 in the prior week. dollar's move came as longer-term U.S. Treasury yields rose on Thursday as investors positioned for a large pandemic relief package from Washington and a stabilizing U.S. labor market.

The benchmark 10-year yield US10YT=RR was up 1.5 basis points in morning trading at 1.1461% and at one point reached 1.16%, its highest since Jan. 12. in the U.S. Senate were poised for a marathon "vote-a-rama" session aimed at overriding Republican opposition to President Joe Biden's $1.9 trillion COVID-19 relief proposal. the same time, the British pound GBP=D3 dove as much as a half percent on the day ahead of scheduled comments by the Bank of England about the possibility of negative interest rates and then rebounded to trade up 0.12% after the central bank spoke. bank said it would ask banks to get ready for the possibility of negative rates, but that financial markets should not view sub-zero borrowing costs as a foregone conclusion.

It added that while it expects Britain's economy to probably shrink by 4% in the first three months of 2021, it should recover rapidly towards pre-COVID levels over the year.

"The thing to monitor is how quickly Europe can get out the vaccine. If we see continued slowness there, you will see the gap widen between euro and dollar," said Justin Onuekwusi, portfolio manager at Legal & General.

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Currency bid prices at 10:48AM (1548 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Dollar index

=USD

91.5070

91.0750

+0.48%

1.696%

+91.5430

+91.0610 Euro/Dollar

EUR=EBS

$1.1970

$1.2035

-0.54%

-2.03%

+$1.2043

+$1.1967 Dollar/Yen

JPY=D3

105.4600

105.0700

+0.40%

+2.13%

+105.4850 +105.0200 Euro/Yen

EURJPY=

126.23

126.39

-0.13%

-0.54%

+126.4600 +126.1100 Dollar/Swiss

CHF=EBS

0.9037

0.8990

+0.53%

+2.15%

+0.9040

+0.8987 Sterling/Dollar GBP=D3

$1.3658

$1.3642

+0.12%

-0.03%

+$1.3697

+$1.3566 Dollar/Canadian CAD=D3

1.2836

1.2785

+0.41%

+0.81%

+1.2842

+1.2778 Aussie/Dollar

AUD=D3

$0.7592

$0.7618

-0.34%

-1.31%

+$0.7648

+$0.7589 Euro/Swiss

EURCHF=

1.0815

1.0818

-0.03%

+0.07%

+1.0823

+1.0811 Euro/Sterling

EURGBP=

0.8763

0.8820

-0.65%

-1.95%

+0.8839

+0.8752 NZ

NZD=D3

$0.7156

$0.7213

-0.79%

-0.35%

+$0.7224

+$0.7155 Dollar/Dollar

Dollar/Norway

NOK=D3

8.6475

8.5830

+0.72%

+0.68%

+8.6510

+8.5980 Euro/Norway

EURNOK=

10.3545

10.3250

+0.29%

-1.10%

+10.3685

+10.3229 Dollar/Sweden

SEK=

8.4623

8.3948

+0.24%

+3.24%

+8.4667

+8.3943 Euro/Sweden

EURSEK=

10.1318

10.1072

+0.24%

+0.55%

+10.1468

+10.1075

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates

https://tmsnrt.rs/2RBWI5E USD

https://tmsnrt.rs/3a0DdOD

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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