TOKYO- The dollar languished on Wednesday, hovering just above a seven-week low with subdued US bond yields reducing the currency’s yield appeal.
The safe-haven greenback got some respite from a pullback in world stocks from record highs as flare ups in coronavirus infections from India to Canada soured the outlook for a quick global recovery.
The safety bid also bolstered the yen, which climbed to a fresh seven-week peak of 107.88 per dollar on Wednesday.
The dollar index, which tracks the US currency against six major peers, was at 91.196 early in the Asian trading day after slumping as low as 90.856 on Tuesday for the first time since March 3. It has declined 2.2 percent so far this month.
The index “has broken down through a key short-term support level at 91.30 and can see further downside to the low 90s,” with the euro rising to around $1.22, Westpac strategists wrote in a client note.
“We were looking for the (index) to top in Q3, when second derivative US rebound measures crest and Europe gets her vax act together, but the early indications are that vaccinations across Europe are picking up pace already,” Westpac said.
The single currency traded at $1.2039, after touching a seven-week high of $1.2079 overnight. – Reuters
