Dollar heavy as clues sought on pace of US recovery;
bitcoin near record high
Mon Feb 15 2021
The dollar index was at 90.427, close to last week's low of
90.249 - a level not seen since January 27
The dollar started the week pinned near two-week lows on
Monday as traders questioned whether the recovery from the pandemic in the
United States would be as fast as expected. Bitcoin traded below $49,000 after
pushing to a record $49,714.66 over the weekend, following endorsements last
week by Tesla and BNY Mellon.
The dollar index was at 90.427, close to last week's low of
90.249 - a level not seen since Jan. 27. The gauge hit a two-month top of 91.6
on Feb. 5 on hopes that a U.S. rebound would outpace other major economies, but
has since retreated amid disappointing employment data. "The rebound in
the dollar ... was initiated by relative U.S. economic outperformance, or
expectations thereof," said Shinichiro Kadota, senior currency strategist
at Barclays Capital in Tokyo.
"Now the market is looking for actual evidence that the
U.S. economy is outperforming." "The economic data needs to
improve," he said.
The euro was little changed at $1.21215 after climbing 0.6%
last week. The dollar rose 0.2% to 105.09 yen, recovering from some of the
previous week's 0.4% loss. Many financial markets in Asia remained closed on
Monday for Lunar New Year, with the United States also out for Presidents Day.
There has been a tug-of-war over the dollar's direction thisyear with some
market participants expecting it to strengthen as the U.S. economy outperforms
peers including Europe.
Others view the U.S. recovery as a key driver in a global
reflation narrative that should lift riskier assets at thed ollar's expense.
"The U.S. outperformance story ... has a lot further to run thanks to
fiscal stimulus and faster vaccine deployment,"Westpac strategists wrote
in a client note. "But ongoing aggressive U.S. reflationary fiscal and
monetary policy settings will leave DXY on a sustained medium-term bear
trend," the note said, referring to the dollar index. Bitcoin last traded
at $48,772, little changed from therecord high. It surged roughly 25% last week
for its best performance since the turn of the year.
Source: www.thehindubusinessline.com