Connect with us

Hi, what are you looking for?

Investing Ideas

Dollar Up on the Wings of Powell’s Dovish Comments

Forex8 hours ago (Mar 05, 2021 12:14AM ET)

(C) Reuters.

By Gina Lee – The dollar was up on Friday morning in Asia, hovering near three-month highs after U.S. Federal Chairman Jerome Powell stuck firmly to a dovish line even as bond market volatility increased.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.06% to 91.703 by 12:07 AM ET (5:07 AM GMT).

The USD/JPY pair inched up 0.08% to 108.06, maintaining the multi-month high of 108 reached during Thursday’s 0.9% surge.

The AUD/USD pair was down 0.22% to 0.7708 and the NZD/USD pair fell 0.32% to 0.7166.

The USD/CNY pair inched up 0.06% to 6.4730. China set a conservative economic growth target of above 6%, below economists’ forecasts, for 2021 as the National People’s Congress opened earlier in the day. China’s leadership also outlined fiscal support for China’s economic recovery from COVID-19.

The GBP/USD pair inched down 0.08% to 1.3883.

The greenback soared the most in a month after Powell’s comments at the Wall Street Journal jobs summit on Thursday. He said the sell-off in Treasuries during the past week was “notable and caught my attention” but was not “disorderly” or likely to push long-term rates so high as to warrant a more forceful Fed intervention. Instead, Powell reiterated the central bank’s commitment to maintaining its ultra-easy monetary policy until the economy is “very far along the road to recovery.”

The comments re-ignited a selloff in Treasuries, causing the benchmark ten-year Treasury yield to climb back above 1.5%, rising as high as 1.5830% in Asia. The climb came after the yield soared to a three-month height of 1.614% during the previous week.

Riskier currencies including the Australian and New Zealand dollars, were down along with global stocks as investor sentiment soured again.

“Quite a night for market volatility, with the bond market the center of attention … the market was seemingly looking for Powell to push back harder on the recent increase in yields,” National Australia Bank (OTC:NABZY) head of forex strategy Ray Attrill said in a note.

The safe-haven dollar has been supported by higher Treasury yields and the increased risk aversion brought about by the bond rout.

Meanwhile, investors looked to progress on the latest U.S. stimulus measures. The U.S. Senate voted on Thursday to take up President Joe Biden’s $19 trillion stimulus package bill and is widely expected to approve it when debate concludes over the weekend.

Also adding to worries of higher inflation is the continuous global rollout of COIVD-19 vaccines, in turn, heightening hopes for a quick global economic recovery from COVID-19. Commodity-linked currencies, such as the AUD and NZD, have been hurt by the souring mood even as some investors expect them to gain as economies re-open after COVID-19.

Dollar Up on the Wings of Powell’s Dovish Comments

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like


Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.


Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.


Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.


At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores.

Disclaimer: it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved