The dollar pushed higher to a four-month high in early European forex trading on Thursday. The third Covid wave and slow vaccine rollout in Europe has weighed on the single currency.
The likes of Germany, France and Italy have recently extended their mobility restrictions. This was due to a sharp pickup in Covid-19 cases.
In France, Health Minister Olivier Veran on Wednesday said the government is ready to take tougher measures. That is if current restrictions to limit the spread of the pandemic fail.
In the United States, on Wednesday, U.S. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell expressed their confidence in the U.S. recovery.
On the other hand, large parts of the developed and developing world are struggling to reopen their economies. They are still in combat with the rising numbers of Covid cases.
Currencies Movements
The Dollar Index was up 0.2% at 92.712 At 4 AM ET (0800 GMT). It was just below a four-month high of 92.692 hit overnight.
The USD/JPY added 0.3% at 109.07, while GBP/USD lost 0.1% at 1.3672. The risk-sensitive AUD/USD was unchanged at 0.7583.
EUR/USD sank 0.1% at 1.1805 after trading at a new four-month low of 1.1803 earlier. The single currency suffered as a result of the region’s extended lockdowns and delayed vaccine rollouts.
Meanwhile, USD/TRY slipped 0.1% to 7.9170. The lira was benefitting slightly from reports that Turkey’s new central bank governor has promised to stick to single interest-rate. This was the framework adopted by his predecessor.
USD/CHF edged up 0.1% to 0.9365 and EUR/CHF climbed 0.1% to 1.1061. This came ahead of the latest interest rate decision by the Swiss National Bank.
The greenback held on to most of a broad two-day advance. Concerns ranging from Europe’s third COVID-19 wave and potential U.S. tax hikes to the persistent spectre of inflation fueled the single currency.
Germany reversed a call for a strict lockdown over the Easter period. But even that did little to build confidence in the region’s economic outlook. It is instead compounding discontent with Chancellor Angela Merkel’s handling of the pandemic.
Meanwhile, benchmark 10-year Treasury yields consolidated around 1.6%. This was a week after hitting a more than one-year top of 1.754%. This had also supported the dollar.
In cryptocurrencies, bitcoin fell below $52,000 again in early Asian trading then recovered to around $52,123.
