By Administrator_India
The dollar inched up on Thursday morning in Asia after hitting a seven-month high against the yen during the previous session. With U.S. Treasuries recording orderly gains and boosting the dollar, U.S. Federal Reserve Chairman Jerome Powell is also due to give a speech later in the day.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.03% to 91.032 by 9:19 PM ET (2:19AM GMT), with the dollar holding onto its 0.32% gain from Wednesday.
The USD/JPY pair inched up 0.04% to 107.03, the highest level since July 2020 and above the 107 mark.
The AUD/USD pair edged up 0.17% to 0.7788 and the NZD/USD pair edged up 0.16% to 0.7258.
The USD/CNY pair inched up 0.03% to 6.4696. The GBP/USD pair edged down 0.11% to 1.3937, easing slightly.
The benchmark ten-year Treasury yield gained to 1.4894% during the Asian session, with the dollar trading up against most currencies as calm continued to return to the market and boosted investor sentiment.
The dollar could continue to gain against the yen should Treasury yields continue to rise in an orderly fashion but could fall against currencies of major commodities exporters as the global economy continues to recover from COVID-19.
“The performance of the dollar will vary depending on the currency … dollar/yen looks well bid because of yields and because Japan’s economy is underperforming relative to the U.S., but as long as commodity prices rise, the dollar will weaken against commodity currencies,” Mizuho Securities chief currency strategist Masafumi Yamamoto told Reuters.
Powell will give a virtual speech to the Wall Street Journal Jobs Summit later in the day, and investors will be closely watching for any signs of concern over the recent Treasuries selloff and for any changes in his assessment of the economy ahead of the Fed’s next meeting ending Mar. 17.
Concerns that the unprecedented government spending to support the global economy through COVID-19 could drive inflation up resulted in a massive selloff in Treasuries since the beginning of 2021. The selloff culminated in 10-year yields hitting their highest levels in a year during the previous week.
The rise caused global shares to hit pause on their rally and the dollar to drop against most currencies. However, as calm continues to return to the market, it seems that the dollar is back on an upwards trend.
However, other investors were more cautious, saying that the declines in the Australian and New Zealand dollars are likely to be temporary as both economies continue to progress in their economic recovery from COVID-19 and that an acceleration in global trade will give both currencies a boost.
