Dollar Falls as U.S. Yields Slip, but Bearish Bets Easing Amid Recovery By Investing.com

Dollar Falls as U.S. Yields Slip, but Bearish Bets Easing Amid Recovery By Investing.com


© Reuters.

By Yasin Ebrahim

Investing.com – The dollar fell sharply against its rivals Monday, paced by declining U.S. bond yields, but the pullback could be short-lived as the expected rise in rates has forced some on Wall Street to ease their bearish bets on the greenback.

The , which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.48% to 92.61.

U.S. bond yields slipped, though the 10-year yields remained above 1.7% after data showed U.S. hit its highest level since 1997. The drag on the greenback from lower yields, however, is unlikely to continue in the wake of the positive economic backdrop.

“A backdrop of strong economic growth and rising inflation expectations may well see the U.S. yield curve continue to steepen. We continue to recommend a defensive posture in bonds,” Wells Fargo (NYSE:) said.

The poor start to the week in the dollar did little to knock optimism on the greenback as its three-month win streak has forced some on Wall Street to rein in the bearish calls.

“Although we still expect these currencies to appreciate versus the dollar over the coming quarters, firm U.S. growth and rising bond yields may keep the greenback supported over the short-term,” Goldman Sachs (NYSE:) said. “After a choppy few months we are closing our recommended dollar short trade.”

Still, the road ahead for the greenback could be paved with uncertainty in the form of a potential rebound in the .

Goldman Sachs forecasts the single currency to hit $1.28 against the dollar by year end – from the current level of $1.1813 – thanks to expected to boost vaccine rollout efforts.

France last week imposed a four-week lockdown including school closures from Saturday, while Italy extended restrictions as a third wave of Covid-19 sweeps across parts of the continent.  

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Leave a comment

Send a Comment

Your email address will not be published. Required fields are marked *