Financial News

Dollar falls as yields languish, euro gets extra late-day lift

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NEW YORK — The dollar fell against major currencies on Friday as U.S. yields

languished and the euro got an extra late-day lift following a earlier boost from an upbeat survey of

purchasing managers.

The dollar index fell 0.5% to 90.8080, a level not seen since early March, after the euro

climbed 0.7% to $1.2098, pushing through its earlier high for the week.

More than half of the euro’s appreciation came late in the day after the market digested earlier

economic news.

“This is thin markets on a Friday afternoon,” said Marc Chandler, chief market strategist at Bannockburn

Global Forex in New York. “The euro making new highs for the week late in the day suggests it is going to

have momentum into next week.”

The exaggerated move came after the markets saw a European purchasing managers’ index for April come in

better than expected, supporting the view that the region’s economic recovery is accelerating and won’t keep

lagging so far behind the U.S. recovery.

A similar U.S. survey showed factory activity powered ahead in April. Another report said new home sales

in the United States jumped 21% in March. Both affirmed that the economy was being lifted by government

stimulus and increased vaccinations against the coronavirus.


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The U.S. survey results were tempered by manufacturers reporting increased struggles to get raw

materials and other supplies for production.

Yields on 10-year U.S. Treasuries traded in a narrow range through the news and were at 1.56% late in

the day, about four basis points lower than at the start of the week.

Until the late-day boost to the euro, Chandler said Friday’s major currency markets were largely “a

continuation of what we have seen since the beginning of the month,” with the dollar losing much that it had

gained earlier in the year as yields climbed to 1.75% on March 31.

“The dollar had a very strong first quarter and the market is still unwinding that,” Chandler said.

The dollar in the first quarter gained 3.6% but it has lost about 2.6% so far in April.

Markets now are looking toward next week’s meeting of the U.S. Federal Reserve Open Market Committee to

review monetary policy and the economy.

Fed Chair Jerome Powell is expected to echo Thursday’s message from European Central Bank President

Christine Lagarde that scaled back some expectations for a withdrawal of monetary easing.

Powell’s remarks could put more downward pressure on Treasury yields and limit any bounce of the dollar.

Auctions of U.S. Treasuries next week are not likely to be big factor, Shaun Osborne, chief currency

strategist at Scotiabank told the Reuters Global Markets forum on Friday.

“There still appears to be good demand for Treasury product,” Osborne said.


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“The FOMC will likely be the highlight of a busy data week for the U.S.,” Osborne said.

Overall, he expects that “low yields, low volatility plus strengthening global growth should drive

diversification away from the USD to riskier assets.”

The Australian and New Zealand dollars firmed on Friday, but traders said risks are

pointed to the downside due to the recent weakening in commodity prices.

The British pound rose 0.3% on the day..

Bitcoin and other cryptocurrencies trimmed some losses that had come out of concern that U.S. President

Joe Biden’s plan to raise capital gains taxes will curb investment in digital assets. Bitcoin, the biggest

and most popular cryptocurrency, slumped as much as 5% and fell below $50,000 for the first time

since early March. It was down 1.5% to $50,932 at 21495 GMT. Smaller rival Ether was down fell

about 2%.


Currency bid prices at 3:41PM (1941 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change


Dollar index 90.8080 91.2870 -0.52% 0.919% +91.2940 +90.8080

Euro/Dollar $1.2098 $1.2016 +0.69% -0.98% +$1.2099 +$1.2013

Dollar/Yen 107.8850 107.9650 -0.07% +4.41% +108.1400 +107.4800

Euro/Yen 130.52 129.72 +0.62% +2.84% +130.5600 +129.6000

Dollar/Swiss 0.9129 0.9169 -0.43% +3.19% +0.9173 +0.9129

Sterling/Dollar $1.3888 $1.3842 +0.33% +1.65% +$1.3895 +$1.3836

Dollar/Canadian 1.2469 1.2503 -0.25% -2.07% +1.2509 +1.2466


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Aussie/Dollar $0.7759 $0.7708 +0.67% +0.86% +$0.7760 +$0.7693

Euro/Swiss 1.1043 1.1015 +0.25% +2.18% +1.1052 +1.1017

Euro/Sterling 0.8710 0.8680 +0.35% -2.54% +0.8718 +0.8673

NZ $0.7202 $0.7166 +0.53% +0.31% +$0.7203 +$0.7151


Dollar/Norway 8.2840 8.3835 -1.03% -3.38% +8.3625 +8.2970

Euro/Norway 10.0236 10.0507 -0.27% -4.24% +10.0625 +10.0211

Dollar/Sweden 8.3801 8.4263 +0.08% +2.24% +8.4615 +8.3800

Euro/Sweden 10.1394 10.1314 +0.08% +0.63% +10.1551 +10.1155

(Reporting by David Henry in New York and Tommy Wilkes in London; Editing by John Stonestreet, Steve

Orlofsky, Andrew Heavens and David Gregorio)


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