Home Topics Business The dollar fell to one-week lows as stocks hit record highs

The dollar fell to one-week lows as stocks hit record highs

© Reuters. This illustration shows Saudi rial, yuan, Turkish lira, pound, US dollar, euro, and Jordanian dinar banknotes

By Stanley White

TOKYO (Reuters) – The dollar remained broadly stable on Monday as investors soaked up last week’s strong US employment report and looked at US service sector data to confirm a solid economic recovery from the coronavirus shock.

The greenback had its best quarter against the major currencies in nearly three years from January to March, thanks to an improving US economy and rising government bond yields.

The US currency looks set to build on these gains as investors look for ways to bet on a global economic recovery after the worst coronavirus pandemic, analysts said.

“I thought there would be a lower correction in the dollar, but that didn’t happen,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“The uptrend in the dollar is very strong. In the new quarter, it may be best for investors to just follow this trend.”

The dollar was last traded at 110.62 yen, not far from its strongest level in a year.

Against the euro, the dollar was trading at USD 1.1760, which is close to a five-month high.

The British pound was stable at $ 1.3826.

The dollar rose to 0.9430 Swiss francs.

The US economy created more jobs than expected in March, data on Friday showed. There was little reaction on currencies, however, as most major equity and bond markets were closed for the Easter break.

Overall, the outlook for the dollar remains solid as the underlying economic stimulus points to a stronger recovery. A survey by the Institute for Supply Management, due to be released later Monday, is expected to show that U.S. non-manufacturing activities expanded faster in March.

Trading in Asia was muted on Monday as financial markets in Australia, New Zealand, China and Hong Kong are also closed, although the dollar tends to strengthen further, analysts said.

The one against a basket of six major currencies has barely changed at 93,015.

Short dollar positions in the foreign exchange market fell last week to their lowest level since June last year, data from the US Commodity Futures Trading Commission showed – another positive sign for the greenback.

Elsewhere, the Australian dollar rose to $ 0.7613 while the New Zealand dollar bought $ 0.7027.

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