Dollar rebounds from 3-month low after U.S. data; FOMC minutes awaited
The dollar rebounded from a three-month low against a basket of currencies on Wednesday as a risk-on rally in global financial markets appeared to stall after U.S. data showed a less-than-rosy economic picture.
The number of Americans filing first-time claims for jobless benefits increased further last week, suggesting that an explosion in new COVID-19 infections and business restrictions were boosting layoffs and undermining the labor market recovery.
The U.S. dollar index was 0.05% lower at 92.086, having fallen as low as 91.941 earlier in the session, its weakest since Sept 1. Against the yen, the dollar was 0.07% lower.
The dollar has come under pressure in recent months from expectations that U.S. rates will remain near historic lows for years to come, and as news of various COVID-19 vaccines helped boost investors’ appetite for riskier currencies.
Still, the dollar is expected to continue to fall as progress on a vaccine and the expected choice of former Federal Reserve Chair Janet Yellen as the next U.S. Treasury secretary relieved two big uncertainties for investors.
Later today, investors will be focused on the minutes from the Federal Reserve’s latest meeting.
“We don’t expect much surprise and see limited room for the minutes to tame the dollar decline. If anything, the risks are skewed to a possible surprise coming from hints at an expansion in quantitative easing in December,” strategists at ING said in a note to clients.
Sterling edged lower on Wednesday after British finance minister Rishi Sunak announced a one-year spending plan to parliament, along with new forecasts for the country’s coronavirus-hit economy.
Bitcoin, the most popular cryptocurrency, climbed to $19,271, just short of its record of $19,666 from December 2017.
Reference: CNBC
Thai
Eng