Dollar Regains Previous Losses with a Conservative Hike

With the treasury yield trudging higher, the dollar made a conservative hike to end the week with gains.

The USD index, which tracks the performance of the greenback against other entities in the basket, bounced off a near three low in today’s trading session.

It climbed by 0.33% and settled at 89.82 and has reached 89.85 at one point. The resistance level remains at 90 points with no technical resistance until 91.0.

According to analysts, a weekly close above the 90-point threshold would mean that the incumbent trend would continue in the short term prospect.

With the recent muscle-flexing, the EUR/USD pair fell by 0.1% to 1.2262 after reaching near its three-year high in the previous session.

On the other hand, the pound managed to hike by 0.1% to 1.3579 as the risk sentiment is yet again getting stronger among investors.

Consequently, the risk-sensitive Aussie also hiked by 0.2% to 0.7783 following the dominant trend.

The fluctuation towards risky assets is backed by the outlook on a bigger stimulus and government spending under the Biden administration.

The recent victory by Democrat candidates in the state of Georgia runoff elections consolidated the “delayed” blue wave that could have been cheered upon back in the November elections.

Despite the deviation away from safe havens, the US dollar is buoyed mainly by the rising appetite for US treasury yields.

The benchmark gained by a robust 1% earlier in the week which is the first time in nearly 10 months.

 This is due to the recent political turmoil in Washington brought by the riot believed to have started by Trump supporters.

USD JPY Prospects

Yesterday, the International Monetary Fund’s chief economist asserted that the United States and Japan will be back on an economic rebound by the second half of the year.

With this, analysts highlighted that while vaccine deliveries will allow the world’s major economies to reopen on 2H, corrections for the dollar’s price will remain shallow.

The pair made conservative movements for the day and ended the week with a fall. The USD JPY exchange is down by 0.04% to 103.81.

Experts in the field noted that their forecast for the currency duo remains within the 103-point threshold for the year-end forecast.

The pair climbed by 0.75% yesterday which is the best single-day gain made since November of last year.

Meanwhile, Japan currently battles a surging number of infections which led to the declaration of a state of emergency on Tokyo and three other nearby prefectures.