Dollar Fails To Hold Early Gains, Turns Weak For 3rd Straight Day

Dollar Fails To Hold Early Gains, Turns Weak For 3rd Straight Day

The U.S. dollar turned weak against most of its rivals on Monday despite displaying some strength in the Asian session earlier in the day.

Dollar advanced earlier in the day as treasury yields rose amid hopes the accelerated vaccine rollouts and aggressive fiscal stimulus will spur a faster economic revival and stoke inflation.

On the stimulus front, U.S. Democrats are looking to swiftly pass the Covid-19 relief bill. The U.S. House of Representatives is expected to vote on President Joe Biden’s proposed package by the end of the week.

Meanwhile, the Federal Reserve Chairman Jerome Powell is scheduled to testify before the Senate Banking Committee on Tuesday and the House Financial Services panel the following day.

In U.S. economic release today, the Conference Board said its leading economic index climbed by 0.5% in January after rising by an upwardly revised 0.4% in December. Economists had expected the leading economic index to rise by 0.3%, matching the increase originally reported for the previous month.

The dollar index drifted down to a low of 90.00 a little past noon, and despite regaining some lost ground subsequently, was still languishing well below its previous close. At 90.13, the index was down by over 0.25%.

Against the Euro, the dollar was down more than 0.4% with the Euro fetching $1.2168 a unit, compared to $1.2120 on Friday. The dollar dropped to as low as $1.2171 before paring some losses.

The Pound Sterling firmed up, fetching $1.4087 a unit about an hour past noon, but retreated to $1.4062 later on, but was still firmly up in positive territory, gaining about 0.36%.

U.K. Prime Minister Boris Johnson today tabled a four-step cautious roadmap in Parliament for the country to be eased out of its strict stay-at-home lockdown, with a tentative June 21 timeline for most limits on social contact to be lifted if the coronavirus infection rates remain in check.

The Yen firmed up to 105.08 a dollar, up more than 0.3% from Friday’s close of 105.43.

The AUD-USD pair was trading at 0.7914 a little while ago, giving the Aussie a gain of nearly 0.6%.

The Swiss franc was little changed at 0.8965 a dollar, while the Loonie was down slightly at C$1.2620, after recovering well from the session’s low thanks to a surge in crude oil prices.