TOKYO- The dollar hit a fresh four-month high to the euro on Thursday as the US pandemic response continued to outpace Europe’s, which has been hobbled by extended lockdowns and delayed vaccine rollouts.
The safe-haven greenback remained broadly stronger following a two-day rally amid worries ranging from Europe’s third COVID-19 wave and potential US tax hikes to the persistent specter of inflation.
Even Germany’s reversal of a call for a strict lockdown over the Easter period did little to build confidence in the region’s economic outlook, instead compounding discontent with Chancellor Angela Merkel’s handling of the pandemic.
“The weak point in Europe remains around the vaccine rollout amid the rise in new virus cases and the tightening of restrictions … which likely means the mooted acceleration in Q2 may have to be pushed back by a quarter,” Tapas Strickland, director of economics and markets at National Australian Bank, wrote in a client note.
“The narrative of the US outperforming Europe in the coming quarter remains.”