Posted on: February 22, 2021 Posted by: Administrator_India Comments: 0

By Administrator_India

Capital Sands

The dollar was down on Monday morning in Asia, falling to a three-year low against the AUD and a three-year low against the GBP as continued progress on curbing the COVID-19 virus boosted risk sentiment.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.02% to 90.323 by 9:14 PM ET (2:14 AM GMT).

The USD/JPY pair was up 0.22% to 105.66, with the dollar holding steady against the yen.

The AUD/USD pair was up 0.26% to 0.7890 and the NZD/USD pair was up 0.23% to 0.7320. Giving a boost to the Antipodean risk currencies is the rollout of COVID-19 vaccines, with New Zealand starting inoculations on Sunday and Australia following suit earlier in the day.

Australia was also set to report no local cases for a third consecutive day. Fitch also said on Monday that the vaccines will also ease risks to Australia’s economy over the year as it maintained the country’s AAA credit rating, albeit with a negative outlook.

The USD/CNY pair edged up 0.11% to 6.4625.

The GBP/USD pair inched up 0.08% to 1.4025, with the pound climbing above the 1.4 mark. In the U.K., investors await Prime Minister Boris Johnson’s plan to ease the current COVID-19 lockdowns as the country presses on with one of the fastest vaccine rollouts globally.

An investor move towards currencies with close ties to the commodities trade as risk sentiment improves also benefitted the Antipodean currencies. The dollar dropped towards a three-year low against the NZD, while the AUD was at its highest level since March 2018.

Some investors said that the safe-haven greenback is likely to drop further as the focus remains on the global economic recovery from COVID-19, and progress against the pandemic continues to be made.

“Commodity currencies and the pound are particularly strong against the dollar, and this trend looks set to continue,” Daiwa Securities foreign exchange strategist Yukio Ishizuki told Reuters.

“The U.K.’s vaccination program is making a lot of progress. Economic activity is gradually returning to normal in many places, which puts some pressure on the dollar,” Ishizuki added.

Also contributing to the dollar’s woes was dollar net short positioning falling to $29.09 billion during the previous week, according to Commodity Futures Trading Commission data. This is dollar shorts’ lowest level since mid-December and a fourth consecutive week of losses, an indication that some dollar optimism remains.

Recent gains in long-term Treasury yields and an improved U.S. COVID-19 response will lend the dollar some mild support, Daiwa’s Ishizuki said.

Meanwhile, in cryptocurrency, bitcoin dropped slightly to the $57,090 mark but remained near the previous week’s record high as mainstream acceptance of the digital asset continues to increase. Rival cryptocurrency Ether dropped to $1,918.

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