U.S. Dollar Drops As Yields Fall
The U.S. dollar weakened against its major counterparts in the
European session on Monday, as U.S. treasury yields fell amid
growing hopes that the Fed will keep interest rates near zero
levels for longer duration.
The benchmark U.S. 10-year Treasury yields edged lower towards
multi-week lows touched last week after the U.S. Federal Reserve
reiterated its view that any spike in inflation was likely to be
Christopher Waller, the newest governor on the Federal Reserve's
Washington-based board, said on Friday that any accompanying spike
in inflation will prove short-lived- echoing the view of most U.S.
On the vaccine front, half of all adults in the U.S. have
received at least one COVID-19 shot, marking another milestone in
the nation's vaccination campaign.
Earnings results are in focus, with Coca-Cola, IBM, Johnson
& Johnson, Netflix, Intel, American Express and Honeywell set
to unveil their quarterly results this week.
The dollar index was down at its lowest levels in more than a
month, at 91.13.
The greenback slipped to 1-1/2-month lows of 0.9129 against the
franc and 1.2048 against the euro, from its early high of 0.9215
and a 5-day high of 1.1943, respectively. The greenback is likely
to test support around 0.88 against the franc and 1.24 against the
euro, if it drops further.
The greenback touched 1.3927 against the pound, its weakest
level since March 19, while hitting a 1-1/2-month low of 108.01
against the yen. The greenback is poised to find support around
1.40 against the pound and 106.00 against the yen.
The greenback declined to near 5-week lows of 1.2471 against the
loonie, 0.7785 against the aussie and 0.7198 against the kiwi, off
its early high of 1.2529, 4-day high of 0.7706 and a 5-day high of
0.7122, respectively. Next key support for the greenback is seen
around 1.21 against the loonie, 0.79 against the aussie and 0.74
against the kiwi.
Looking ahead, at 8:15 am ET, Canada housing starts for March
will be published.