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With Fed policymakers expected to forecast the fastest U.S.
economic growth in decades in the wake of COVID-19 vaccinations
and $1.9 trillion in new stimulus, market participants will be
focused on clues that the central bank could start raising rates
in 2023, earlier than it had said.
In any event, expectations of a faster-than-expected economic
recovery will likely weigh.
"U.S. yields might receive further upwards thrust and pull the
dollar along with them in the absence of a clear commitment on
the part of the Fed that a further rise in yields is
undesirable", Commerzbank Antje Praefcke analyst wrote in a
morning note.
She added that because the European Central Bank had in contrast
committed to increase the pace of bond buying to keep a lid on
rising yields, the euro might suffer against the dollar in the
short term.
The euro was down 0.07% at $1.1893 after declining in the past
three sessions.
Hurt by a possible delay in the European Union's vaccination
effort, the euro seemed set to test last week's 3 1/2-month low
of $1.18355.
Europe's medicines watchdog will release results of its
investigation into incidents of bleeding, blood clots and low
platelet counts in recipients of AstraZeneca's coronavirus
vaccine on Thursday afternoon.
Europe's painful recovery from the pandemic is in sharp contrast
with other economies which seem less dependant on monetary
stimulus to pull though.
The Bank of Canada for instance is likely to reduce its bond
purchases as soon as next month, strategists say.
In morning trades in Europe, the dollar index ticked up 0.09%
and stood at 91.953, having already risen for three straight
sessions on support mainly from elevated U.S. bond yields.
Benchmark 10-year Treasury yields were also ticking up at
1.6340%. They had reached 1.6420% on Friday for the first time
since February 2020.
Against the yen, the greenback firmed 0.15% to 109.14 yen,
hovering near nine-month highs hit this week.
The British pound was up 0.14% at $1.3914 recovering from
profit-taking after it hit a near three-year high last month on
the back of a fast vaccine rollout.
Commodity-linked currencies including the Australian dollar, the
New Zealand dollar and the Canadian dollar eased slightly
against the U.S. dollar, tracking weakness in commodity prices.
[MET/L] [O/R]
In the cryptocurrency market, bitcoin fell 2.1% to $55,708.79,
slipping further away from a record high of $61,781.83 hit on
Saturday.
Currency bid prices at 843 GMT
Description RIC Last U.S. Close Previous Session Pct Change YTD
Pct Change High Bid Low Bid
Euro/Dollar $1.1894 $1.1903 -0.08% -2.66% +1.1908 +1.1887
Dollar/Yen 109.1250 109.0200 +0.12% +5.67% +109.2000 +109.0950
Euro/Yen 129.80 129.75 +0.04% +2.25% +129.9300 +129.7200
Dollar/Swiss 0.9279 0.9248 +0.34% +4.89% +0.9280 +0.9248
Sterling/Dollar 1.3914 1.3895 +0.14% +1.85% +1.3929 +1.3880
Dollar/Canadian 1.2461 1.2448 +0.10% -2.14% +1.2462 +1.2434
Aussie/Dollar 0.7729 0.7746 -0.19% +0.49% +0.7747 +0.7724
NZ Dollar/Dollar 0.7182 0.7190 -0.11% +0.01% +0.7194 +0.7174
All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ
(Reporting by Hideyuki Sano in Tokyo and Sagarika Jaisinghani in
Bengaluru; Editing by Sam Holmes, Gerry Doyle and Andrew
Cawthorne)
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Thompson Reuters is solely responsible for this content.
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