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FOREX-Dollar gains as U.S. growth seen likely to outperform

Published 03/03/2021, 16:08
Updated 03/03/2021, 16:12
© Reuters.

© Reuters.

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

(New throughout, updates prices, changes byline, dateline;
previous LONDON)
By Karen Brettell
NEW YORK, March 3 (Reuters) - The dollar gained on Wednesday
as investors priced for strong U.S. growth relative to other
regions, while the safe haven Japanese yen continued to weaken
to a seven-month low.
Investors have boosted bets on U.S. growth and inflation as
the government prepares new fiscal stimulus, and speculation is
rising that the Federal Reserve could also be closer to
normalizing monetary policy than previously expected.
"What the market is looking at today are growth
differentials between a recovering U.S. and more of a sputtering
Europe," said Joe Manimbo, senior market analyst at Western
Union Business Solutions, in Washington.
Data on Wednesday showed that the euro zone economy is
almost certainly in a double-dip recession as COVID-19 lockdowns
continue to hammer the services industry. U.S. data also showed that private payrolls rose by 117,000
jobs last month, according to the ADP National Employment
Report, missing expectations.
However, "expectations are for stronger hiring" when the
U.S. releases jobs data for February on Friday, Manimbo said.
The dollar index =USD was last up 0.22% at 90.997.
The euro EUR=EBS dipped 0.30% to $1.2054.
The U.S. currency has also benefited from a rise in U.S.
Treasury yields. Benchmark 10-year yields US10YT=RR on
Wednesday rose to 1.481%, though they are below a one-year high
of 1.614% reached last week.
Comments by Federal Reserve Chairman Jerome Powell on
Thursday will be closely evaluated for any indications that the
Fed is uncomfortable with the recent yield increases. He is
speaking at an event on the U.S. economy.
Riskier currencies including the Australian dollar dipped as
stocks fell, indicating worsening risk sentiment. .N
The Aussie AUD=D3 was last down 0.57% at $0.778. It has
fallen from a three-year high of $0.8007 last week.
Meanwhile the safe haven Japanese yen JPY=D3 continued to
weaken, falling as far as 107.08 yen, the weakest since July 23.
The British pound was last down 0.06% on the day at $1.3950
after British finance minister Rishi Sunak said that Britain's
government would borrow significantly more in the coming
financial year than thought just a few months ago. Sunak said the economy would regain its pre-pandemic size in
the middle of 2022, six months earlier than previously forecast,
helped by Europe's fastest COVID-19 vaccination program.
Currency bid prices at 9:45AM (1445 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 90.9970 90.8110 +0.22% 1.129% +91.0620 +90.6260
Euro/Dollar EUR=EBS $1.2054 $1.2091 -0.30% -1.33% +$1.2114 +$1.2043
Dollar/Yen JPY=D3 107.0750 106.7450 +0.17% +3.52% +107.0750 +106.7000
Euro/Yen EURJPY= 129.07 128.99 +0.06% +1.69% +129.4500 +128.7500
Dollar/Swiss CHF=EBS 0.9179 0.9145 +0.39% +3.77% +0.9188 +0.9140
Sterling/Dollar GBP=D3 $1.3950 $1.3963 -0.06% +2.14% +$1.4005 +$1.3939
Dollar/Canadian CAD=D3 1.2648 1.2636 +0.10% -0.67% +1.2657 +1.2594
Aussie/Dollar AUD=D3 $0.7776 $0.7821 -0.57% +1.09% +$0.7838 +$0.7770
Euro/Swiss EURCHF= 1.1063 1.1053 +0.09% +2.37% +1.1086 +1.1055
Euro/Sterling EURGBP= 0.8637 0.8660 -0.27% -3.36% +0.8667 +0.8623
NZ NZD=D3 $0.7248 $0.7292 -0.53% +1.00% +$0.7303 +$0.7246
Dollar/Dollar
Dollar/Norway NOK=D3 8.4950 8.4735 +0.19% -1.14% +8.5215 +8.4420
Euro/Norway EURNOK= 10.2360 10.2430 -0.07% -2.18% +10.2653 +10.2100
Dollar/Sweden SEK= 8.4051 8.3780 +0.03% +2.55% +8.4196 +8.3570
Euro/Sweden EURSEK= 10.1275 10.1247 +0.03% +0.51% +10.1420 +10.1090

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