FOREX-Dollar finds footing on U.S. economy as euro and yen falter

Published 29/03/2021, 01:47
EUR/USD
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* Dollar steady in early Asia; EUR and JPY near major lows
* AUD, NZD clinging to small Friday gains
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, March 29 (Reuters) - The dollar began the week
firmly and within a whisker of milestone peaks against the euro
and yen on Monday, as U.S. economic strength and a vaccine
rollout proceeding much more quickly than in Europe drew
investors into the greenback.
The euro EUR= sat at $1.1788, not far above last week's
four-and-a-half-month trough of $1.1762 and well below its
200-day moving average of about $1.1866.
The common currency is heading for its worst month since
mid-2019 as Europe's faltering vaccination programme runs into a
wave of new infections, a bearish signal as positioning data
shows investors remain heavily long euros. 0#NETUSDFX=
The yen JPY= stood just shy of strong resistance and
Friday's 10-month low of 109.85 per dollar to trade at 109.77
early in the Asia session.
The yen is sensitive to gaps in returns on U.S. and Japanese
government debt.
This year's 76-basis-point rise in 10-year Treasury yields -
as the U.S. economy rebounds - has opened the gap to its widest
since last February. That has drawn Japanese investment, which
has in turn helped push the yen down nearly 6% for the quarter.
The U.S. dollar index =USD rose 0.8% to 92.773 and the
dollar steadied against the risk-sensitive Aussie, kiwi and
sterling, having fallen late on Friday with the positive mood.
Over the quarter the dollar has posted a 0.8% loss on the
pound, which has been supported by Britain's speedy vaccination
rollout, a 0.8% gain on the Australian dollar and a 2.7% gain
against the kiwi, which has been hit by housing market reforms.
The Aussie AUD=D3 was last down 0.1% at $0.7631 on Monday
and the New Zealand dollar NZD=D3 fell by the same margin to
$0.6989, while sterling GBP= slipped 0.1% as well to $1.3784.

"The U.S. is also being helped on its own by some pretty
good economic data, fantastic rollout of vaccines, good pace of
vaccination and (positive) stock markets," said Westpac currency
analyst Imre Speizer.
"The domestic economy is doing better than expected and
likely to be the case for the next few months, so that might
hold the U.S. dollar up and that's what's caused the Aussie,
kiwi and emerging-market currencies to pullback in March."
U.S. jobless claims fell to a one-year low last week and
President Joe Biden said he would double his vaccination goal,
after surpassing 100 million shots 42 days ahead of schedule.
In contrast, European inoculations have plagued by supply
problems and safety concerns.
Last week, the head of Germany's Robert Koch Institute for
infectious diseases also warned a third wave of the virus could
be the worst so far, and on Sunday Chancellor Angela Merkel
raised the possibility of curfews to bring it under control.
Besides infection and inoculation counts, investors looking
to Purchasing Managers Index figures due midweek and for some
details of U.S. President Joe Biden's infrastructure spending
plan.
However the main data will be U.S. hiring figures due on
Good Friday.
"The distribution of forecasts range from 460,000 to 1
million (jobs), where the whisper number sits at the top end of
the range," said Pepperstone's head of research, Chris Weston.
"One million jobs would set the reflation trades alight,
with the S&P500 outperforming, led by cyclicals and cause a
solid sell-off in bond yields taking USD/JPY and USD/CHF
higher," he said. "The euro should push through last weeks lows
of 1.1761 and towards 1.1690."

========================================================
Currency bid prices at 0032 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.1786 $1.1794 -0.06% -3.53% +1.1795 +1.1785
Dollar/Yen JPY=D3 109.6400 109.6650 +0.09% +6.27% +109.7950 +109.7650
Euro/Yen EURJPY= 129.22 129.33 -0.09% +1.81% +129.4200 +129.2300
Dollar/Swiss CHF=EBS 0.9395 0.9393 +0.00% +6.17% +0.9397 +0.0000
Sterling/Dollar GBP=D3 1.3779 1.3799 -0.12% +0.89% +1.3799 +1.3782
Dollar/Canadian CAD=D3 1.2591 1.2571 +0.16% -1.13% +1.2592 +1.2578
Aussie/Dollar AUD=D3 0.7630 0.7642 -0.16% -0.81% +0.7645 +0.7629
NZ NZD=D3 0.6987 0.7000 -0.11% -2.63% +0.6995 +0.6990
Dollar/Dollar


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

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