TOKYO- The safe-haven dollar found support at the start of a new week with traders remaining wary amid the battle on Wall Street between hedge funds and retail investors.
Wrangling over the size of President Joe Biden’s fiscal stimulus package and delays to vaccine rollouts also weighed on sentiment, stoking demand for safer assets.
“What happens in the next one day to one week to one month is probably in the hands of risk sentiment,” said Ray Attrill, head of forex strategy at National Australia Bank in Sydney. “If we do see a deeper equity correction, I’ve got no doubt that the US dollar can show a little bit more strength.”
The dollar index was little changed at 90.58 early on Monday, holding on to last week’s gain of about half a percent, as Asian stocks traded weaker for a fifth session.
The gauge has been largely range-bound in recent weeks, after bouncing from a nearly three-year low of 89.206 at the start of the year.
Investors are trying to evaluate whether an almost 7 percent selloff in 2020 — driven by expectations of a global pandemic recovery amid massive fiscal spending and continued ultra-easy monetary policy — is likely to continue.