From Gina Lee
Investing.com – The dollar fell to nearly two-week lows in Asia on Wednesday morning as safe haven demand subsided. Hopes for a global economic recovery from COVID-19 continue to grow, along with hopes for more massive fiscal and monetary stimulus.
The greenback against a basket of other currencies fell 0.05% to 90.370 at 10:54 p.m. ET (3:54 p.m. GMT).
The pair fell 0.02% to 104.55. The dollar was up 0.1% against the yen after falling to 104.5 in the previous session, its lowest level in February.
The pair rose 0.05% to 0.7742 while the pair fell 0.04% to 0.7237.
The pair was up 0.05% to 6.4378. The price released by China earlier in the day showed the consumer price index (CPI) rose 1% but fell 0.3%. They grew by 0.3% in January compared to the previous year.
The pair was up 0.07% to 1.3824. The pound was down 0.1% after hitting nearly three-year highs in the previous session.
In the cryptocurrency space, the mark was close to $ 46,500 after rising to $ 48,500 overnight on a $ 1.5 billion investment by Tesla Inc. (NASDAQ :).
“The economic outlook for the year seems positive according to the market consensus,” said Michael McCarthy, chief strategist of CMC Markets, to Reuters, pointing to the weaker dollar.
“Sentiment and positioning are the main drivers in the market right now,” he added.
Hope that financial and tax support, solid corporate profits, and the introduction of COIVD-19 vaccines have raised hopes of an economic recovery in the US. The heightened risk sentiment has resulted in declines in assets like the dollar.
Investors remain divided over the impact on the dollar of a $ 1.9 trillion stimulus package proposed by US President Joe Biden.
Those who argue for a positive impact point to a rapid recovery in the US relative to other economies that are boosting the greenback. Those who argue otherwise say a rebound will drive reflation around the world, which will boost riskier assets and contribute to a decline in the dollar.
Westpac analysts argued in a note despite the dollar’s strong start in 2021, with the previous week’s U.S. employment data being a key indicator.
“The disappointing payrolls on Friday flattened the USD completely. This data point casts doubt on the burgeoning US outperformance narrative and focuses attention again on the prospect of continued reflationary US fiscal and monetary policies,” added the Note added.
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