Dollar index at intervals of 4 hours
The greenback fell to a fresh four-week low from major peers on Thursday as Treasury yields eased after last month’s surge and investors are increasingly reassured by the Federal Reserve’s argument that interest rates will remain low for some time.
The Russian ruble fell more than 1.5% to 77.14 per dollar amid reports that the US will announce sanctions against Russia as early as Thursday for alleged election interference and malicious cyber activity. The new package of anti-Russian sanctions should affect the sovereign debt of the Russian Federation, The New York Times reported.
The dollar index, which tracks the dollar against six competing currencies, fell to its lowest level since March 18 at 91.559 in the Asian session before recovering to 91.666.
The euro rose to a four-week high of $ 1.1989, the highest level since March 4, after which it traded virtually unchanged at $ 1.19735.
The dollar changed hands at 108.87 yen after hitting a three-week low of 108.755 on Wednesday.
“The dollar loses its strength slightly on the back of falling US bond yields as the Fed remains soft,” said Yujiro Goto, chief currency strategist at Nomura Securities.
Repeated assurances from Fed officials that it will keep interest rates low helped stabilize US bonds, especially at the short end of the curve.
While many investors remain nervous, the Fed could change its tone later this year if inflation rates are much higher than expected.
The yield on 10-year US bonds fell to 1.6342% in Asian trading, well below the 14-month peak of 1.776% reached at the end of March, making the dollar less attractive in terms of yield.
Meanwhile, stocks rallied and the S&P 500 has set new records this week.
“Sentiment in favor of risk is improving,” says Osamu Takashima, chief currency strategist at Citigroup Global Markets Japan, “resulting in lower bond and dollar yields.
“I believe that the downward trend in the dollar may continue” with a move towards 108 yen and 1.205 dollars per euro in the near future, he said.
Fed Chairman Jerome Powell said Wednesday that over time, the US central bank will cut back on monthly bond purchases before it tackles interest rate hikes, a scenario many investors take for granted.
A weaker US dollar also supported commodity currencies. On Thursday, the Australian dollar rose to a high of $ 0.7745 for the first time since March 23, after rising 1% in the previous session, breaking out of its narrow trading corridor in the past few weeks.
The New Zealand dollar also hit a three-week high of $ 0.7160.
“When economic data gets strong and the Fed doesn’t go hawkish, we can see a rise in risk-sensitive currencies against both the dollar and the yen,” said Nomura’s Goto.
US data is due Thursday, including retail sales data for March and weekly unemployment data at 12:30 GMT.
Bitcoin hovered around an all-time high of $ 64,895.22 hit Wednesday when cryptocurrency platform Coinbase debuted on the Nasdaq during a direct listing. The world’s most popular digital token last changed hands for about $ 63,250.
After volatile trading, the stock closed at $ 328.28, giving the company a market cap of $ 65.39 billion, about the same as the Intercontinental Exchange Inc., owner of the New York Stock Exchange.