Dollar dips to one-week lows as stocks hit record high
The dollar dipped to one-week lows against a basket of currencies on Monday as stocks hit record highs and Treasury yields held below recent highs, though analysts said low liquidity with many parts of the world off for Easter holidays was likely exaggerating the move.
The dollar has rebounded this year along with rising U.S. Treasury yields as investors bet on faster U.S. economic growth and higher inflation as the economy reopens after COVID-19-related business shutdowns.
But the dollar’s drop on Monday even after strong jobs data on Friday may indicate that much of the bullish outlook is priced in, at least for the near-term.
The dollar fell 0.40% against a basket of currencies on Monday to 92.59. It has fallen from 93.44 on Wednesday, which was the highest since Nov. 5.
The euro gained 0.50% to $1.1811. Sterling rose 0.57% to 1.3903. The Australian dollar, which typically rises when risk appetite is strong, gained 0.78% to $0.7653.
Data on Monday showed that a measure of U.S. services industry activity surged to a record high in March amid robust growth in new orders.
Investors are also focused on U.S. President Joe Biden’s proposed infrastructure plan, which would involve raising corporate taxes to pay for the new spending.
Biden would be willing to push through his $2 trillion infrastructure plan without the support of Republican lawmakers if he cannot reach a bipartisan deal, Energy Secretary Jennifer Granholm said on Sunday.
U.S. Treasury Secretary Janet Yellen said on Monday that she was working with G20 countries to agree on a global corporate minimum tax rate to end a “30-year race to the bottom on corporate tax rates.”
The cryptocurrency market capitalization hit an all-time peak of $2 trillion on Monday, according to data and market trackers CoinGecko and Blockfolio, as gains over the last several months attracted demand from both institutional and retail investors.
Bitcoin was last up 1.16% on the day at $58,888.
Reference: CNBC
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