The dollar languished near four-month lows against major currencies on Monday as bets on a robust global economic recovery continued to support currencies seen as riskier.
The dollar index moved around the 90 mark, down 0.2% on the day, slightly above a four-month low on Friday of 89.646.
“Markets have to start pricing in a slightly more hawkish Fed going forward,” Win Thin, global head of currency strategy at Brown Brothers Harriman wrote on Monday morning.
Data due on Friday, including U.S. personal consumption and inflation figures, could move the markets to anticipate a more hawkish tone from the next Fed policy meeting on June 15-16. But for now, Thin said, “the dollar is coming under some modest pressure as the week begins.”
Yields on benchmark U.S. 10-year Treasuries yield fell to 1.604% on Monday from 1.632% late on Friday.
Because the recovery is picking up globally, now strategists are trying to anticipate how quickly yields in other countries will rise compared the likely pace in the United States.
Traders are also watching for progress on a new U.S. stimulus package, after the White House pared down its infrastructure bill to $1.7 trillion on Friday but failed to gain Senate Republican backing.
Among the currencies gaining on the dollar was the euro, up 0.3% to $1.22 The single currency has picked up around 4% on the greenback since March as Europe has moved to catch up with the United States in vaccinating its people and reviving its economy.
Bitcoin rebounded about 10% early in the day and then held around $38,000, recovering from a tough weekend in which it fell as much as 17% to $31,107 on Sunday.
Ether, the second-largest cryptocurrency, rose 16% to $2,435, about half of its high two weeks ago.
Reference: CNBC
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