Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

FOREX-Dollar rises as growth worries weigh on euro

Published 21/01/2021, 02:34 am
Updated 21/01/2021, 02:36 am
© Reuters.

© Reuters.

* Euro 0.2% lower to dollar

* Commodity currencies rise

* Sterling stronger on the day (New throughout, updates prices, market activity, comments to U.S. market open; previous LONDON)

By Saqib Iqbal Ahmed

NEW YORK, Jan 20 (Reuters) - The dollar edged higher against the euro on Wednesday as the risk of extended lockdowns in Europe to combat the spread of COVID-19 and worries about the pace the rollout of vaccines weighed on the common currency.

European countries are struggling to contain the contagion of the coronavirus amid worries that a new variant of the virus could lead to more stringent lockdowns and more economic pain.

Investors are also fretting about the slower pace of the rollout of vaccines relative to the United States and Britain may hobble economic recovery in the region.

Germany's most populous state, North-Rhine Westphalia, said on Wednesday it would delay the opening of new vaccination centres to Feb. 8 due to a temporary slowdown of deliveries of vaccines from Pfizer (NYSE:PFE) PFE.N and its German partner Biotech 22UAy.DE . euro slipped as the risk of longer lockdowns in Europe kept alive the threat of a double-dip recession," Joe Manimbo, senior market analyst at Western Union Business Solutions, in Washington, said in a note.

The dollar was 0.2% higher against the euro, ahead of Thursday's European Central Bank meeting, which, after the broad easing of monetary policy last month, is unlikely to produce any major change.

Investors' appetite for riskier currencies was generally firm ahead of Joe Biden's inauguration as U.S. president at noon (1700 GMT) in Washington.

"The new administration is expected to push an agenda of stronger stimulus of nearly $2 trillion in a bid to put the recovery on a better path," Manimbo said.

U.S. Treasury Secretary nominee Janet Yellen urged lawmakers at her confirmation hearing to "act big" on stimulus spending and said she believes in market-determined exchange rates, without expressing a view on the dollar's direction.

The risk-sensitive Australian dollar was 0.79% higher on the day, while the New Zealand dollar rose 0.69%.

While the dollar has perked up in recent weeks on the back of a rise in U.S. Treasury yields, investors still expect the currency to weaken.

Positioning data shows investors are overwhelmingly short dollars as they figure that budget and current account deficits will weigh on the greenback. 0#NETUSDFX=

A combination of heightened risk appetite in global markets and UK-specific optimism lifted the pound on Wednesday, as it strengthened to its highest in nearly three years against the dollar. GBP=D3

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

https://tmsnrt.rs/2RBWI5E Dollar positioning

https://tmsnrt.rs/35VsqEj

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

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.