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FOREX-Dollar holds advantage on economic optimism, euro looks vulnerable

Published 26/03/2021, 12:02 pm
EUR/USD
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USD/CHF
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AUD/USD
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NZD/USD
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DX
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* Dollar holds gains against major currencies

* Full data calendar awaits traders later in day

* Aussie and kiwi stabilise after brief declines

By Stanley White

TOKYO, March 26 (Reuters) - The dollar traded near multi-month highs against most major currencies on Friday, supported by a wave of optimism due to improving U.S. economic data, the rollout of coronavirus vaccines, and rising Treasury yields.

The euro was in focus ahead of data on German business sentiment due later in the day, but the outlook for the common European currency has soured due to renewed coronavirus lockdowns and the slow pace of vaccinations across the European Union.

The greenback has more room to rise against the euro, but its gains against other currencies in the past few weeks have been so rapid that some analysts are warning against chasing the dollar higher from current levels.

"The euro has broken through the 200-day moving average, and that is a clear sign that it will continue to go lower," said Minori Uchida, head of global markets research at MUFG Bank in Tokyo.

"The yen is getting strong on some of the crosses, which will cap dollar/yen. Yields have supported the dollar, but this move could start to run out of steam."

Against the euro EUR=D3 , the dollar was quoted at $1.1776, close to its strongest since November last year.

The dollar bought 109.21 yen JPY=D3 , which is near its highest since June.

The greenback traded at 0.9396 Swiss franc CHF=D3 , holding onto a 0.5% gain from the previous session.

One notable exception to the dollar's gains was the British pound GBP=D3 , which edged up to $1.3747 after rising 0.4% on Thursday. Data due later on Friday that is forecast to show a rebound in British retail sales could give the pound a further boost.

U.S. jobless claims fell to a one-year low last week and President Joe Biden said he will double his vaccination rollout plan after reaching his previous goal of 100 million shots 42 days ahead of schedule, both of which support optimism in the dollar. dollar index USD= against a basket of six major currencies stood at 92.788, close to a four-month high.

Traders will look to data on U.S. personal consumption due later on Friday for further hints about the strength of the U.S. economy.

During European trading Germany's Ifo survey is expected to show an improvement in business morale. But this is unlikely to halt the euro's slide, because worries about the European Union's slow vaccination rollout and bickering with former member Britain over vaccine exports have become a dominant theme, traders said.

The Australian AUD=D3 and New Zealand dollars NZD=D3 rebounded from sharp losses earlier in the week.

The two currencies are likely to remain supported because their relative success in limiting the economic fallout caused by the coronavirus pandemic, analysts said.

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Currency bid prices at 0025 GMT Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Euro/Dollar

EUR=EBS

$1.1776

$1.1764

+0.11%

-3.61%

+1.1779

+1.1763 Dollar/Yen

JPY=D3

109.2100

109.1050

+0.03%

+5.66%

+109.2300 +109.1350 Euro/Yen

EURJPY=

128.60

128.43

+0.13%

+1.32%

+128.6200 +128.4500 Dollar/Swiss

CHF=EBS

0.9396

0.9401

-0.04%

+6.21%

+0.9399

+0.9397 Sterling/Dollar GBP=D3

1.3747

1.3733

+0.11%

+0.62%

+1.3757

+1.3736 Dollar/Canadian CAD=D3

1.2598

1.2609

-0.08%

-1.06%

+1.2609

+1.2595 Aussie/Dollar

AUD=D3

0.7595

0.7581

+0.18%

-1.27%

+0.7599

+0.7579 NZ

NZD=D3

0.6967

0.6954

+0.20%

-2.97%

+0.6970

+0.6951 Dollar/Dollar

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

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

https://tmsnrt.rs/2RBWI5E

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