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FOREX-Dollar heads for longest weekly losing streak since July

Published 30/04/2021, 06:07 pm
© Reuters.
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* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Ritvik Carvalho and Kevin Buckland

LONDON, April 30 (Reuters) - The U.S. dollar skidded towards a fourth straight weekly decline and its longest weekly streak of losses since last July against a basket of major peers on Friday, as the Federal Reserve stuck to its message of ultra-low interest rates for longer.

The dollar index =USD was on course to end the week 0.2% lower, bringing its losses for April to 2.7%. A four-week losing streak would be the longest since the six-week slide to the end of last July, and the monthly loss would also be the biggest since July's 4% slump.

The Canadian dollar CAD=D3 climbed to a more-than three-year high of C$1.2264 per greenback on Friday, on track for a 1.6% weekly gain that would be its biggest since the start of November.

At the conclusion of the Fed's latest policy meeting on Wednesday, Chair Jerome Powell acknowledged the U.S. economy's growth, but said there was not yet enough evidence of "substantial further progress" toward recovery to warrant a change to its ultra-loose monetary settings. economic growth accelerated in the first quarter, buoyed by government stimulus cheques, setting the course for what is expected this year to be the strongest performance in nearly four decades. that a strengthening economy, particularly in the labour market, might force the Fed into an earlier tapering of its asset-purchase programme had pushed the dollar index, or DXY, to a five-month high at the end of March.

"DXY may attempt a rebound in coming days as expectations turn to a potentially blockbuster April payrolls next week, but gains will prove short-lived with Fed officials to underscore Powell's resolutely dovish stance," Westpac strategists wrote in a client note.

The gauge is likely to drop below 90 in the near term, from 90.6 currently, but the "DXY's depreciation trend is likely more of an ongoing grind than a wholesale sharp setback", they said.

The Fed's dovishness was in marked contrast to the Bank of Canada, which has already begun to taper its asset purchases. Canada's commodity-linked loonie got additional support from a surge in oil to a six-week peak along with higher lumber prices.

Rising commodity prices also supported the Australian dollar AUD=D3 , which gained 0.2% to $0.77785, climbing back toward a six-week high of $0.78180 touched Thursday.

"We think the out-performance of pro-cyclical currencies (those exposed to the global business cycle) should be a core theme for the rest of the year, despite concerns about higher U.S. yields," said Chris Turner, global head of markets at ING.

The euro EUR=EBS traded 0.2% lower at $1.21020, near the two-month high of $1.2150 set the previous session. The shared currency is up 0.2% for the week and 3.3% for the month.

The yen JPY=EBS , a traditional haven, also traded flat at 108.88 per dollar, near the two-week low of 109.22 from Thursday, setting it up for a loss of about 0.9% for the week.

China's yuan CNH=D3 traded near its strongest since March 3 in the offshore market, last changing hands at 6.4711 per dollar, even as gauges of Chinese factory activity showed a loss of momentum in April. yuan has jumped some 1.5% this month from a four-month low of 6.5875 on April 1, but Mizuho strategist Ken Cheung wrote in a client note that a re-pricing of growth trajectories for China versus the United States would keep the rally in check from here.

In cryptocurrencies, ether ETH=BTSP hovered below a record high of $2,800.89 set on Thursday, after being lifted this week on media reports about the European Investment Bank's plans to launch a "digital bond" sale on the ethereum blockchain network. use case of ethereum has just grown exponentially," particularly with wider use of non-fungible tokens (NFTs), said Tim Frost, chief executive at fintech company YIELD App.

"All signs point to a continued bull market."

Bigger rival bitcoin BTC=BTSP traded at $54,343.80, vacillating around that level this week after dipping as low as $47,004.20 on Sunday, following a sharp retreat from the record high of $64,895.22 marked in the middle of the month.

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https://tmsnrt.rs/2RBWI5E Dollar heads for fourth weekly loss

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