Wednesday witnessed the dollar rate hovering one week high, giving new hopes to investors. It was buoyed by weaker euro and huge treasury yields. Interestingly, the policy decision by European Central Bank is seeing some caution by investors.
Against the peers, the dollar index changed a little to reach 92.553. It remained slightly under Tuesday’s high of 92.571. Notably, it was the level seen after September 1, 2021.
On the other hand, the euro price fell flat. It reached $1.18430 after falling to $1.18375 in the last session. It happened for the maiden time since September 2, 2021.
Against the Japanese currency yen, the greenback maintained its massive gain in a month overnight. However, the higher US yields forced the change in the currency, which reached 110.28.
On Tuesday, the benchmark Treasury note, which is 10-year-old, reached as high as 1.385 per cent. For the first time, it rose six basis points since mid-July from Friday’s close. Notably, Monday observed a US holiday.
Since early August, the dollar index plummeted to its lowest levels at the last week’s end. However, the US payroll report influenced everybody to speculate that the Federal Reserve might let go of the announcement of tapering stimulus in the current month.
The resurgence of COVID-19 deaths has also impacted the decision of the US Federal Reserve, and it is thinking or retracting the tapering on stimulus. In the last two weeks, there have been 20,800 deaths. It is alarming for investors as the uncertainty in the market looms large.
On Thursday, President Joe Biden is set to chalk out a strategy to contain the highly infectious delta variant.
Moreover, as per analysts, there’s a possibility that PEPP purchases may fall to 60 billion euros from the current 80 billion a month. It may even see further fall early subsequent year prior to the scheme’s expiration in March 2022.
On the other side, the decision by the Reserve Bank of Australia undermined the Aussie dollar. It led to a change in its position a little. The currency maintained the slip of 0.7 per cent from the previous session on Wednesday and stood at $0.73885.
New Zealand’s kiwi slid by 0.5 per cent overnight and reached $0.7107. Meanwhile, Canada’s loonie remained flat at C$1.26415. It plummeted by 0.9 per cent overnight.