Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Dollar edges lower ahead of Fed, cryptocurrencies jump

07/26/2021 | 03:21pm EDT
FILE PHOTO: An employee counts U.S. dollar bills at a money exchange office in central Cairo

NEW YORK (Reuters) - The dollar edged lower on Monday against a basket of peer currencies as investors positioned themselves ahead of this week's U.S. Federal Reserve policy meeting, while cryptocurrency prices rose to their highest in weeks.

The dollar index was down 0.261% at 92.654 at 3 p.m. Eastern time (1900 GMT), under pressure from the euro and yen, but was still close to last week's 3-1/2-month high of 93.194.

The euro ticked 0.27% higher to $1.1800, even after a survey from the Ifo Institute showed German business morale fell unexpectedly in July on continuing supply chain worries and rising COVID-19 infections.

"What we're seeing in euro-dollar specifically today is a little bit of covering, I think, from some frustrated shorts," said Erik Bregar, head of FX strategy at the Exchange Bank of Canada.

Short positions in euro-dollar had been accumulating since the last Federal Open Market Committee (FOMC) meeting, but "the downside simply isn't working," Bregar said.

"You could argue the FOMC meeting is another reason to perhaps take some chips off the table," Bregar added.

The Fed begins a two-day meeting on Tuesday, followed by a news conference by Chair Jerome Powell on Wednesday, where investors will by listening for any comments on when tapering of the central bank's asset purchases could begin.

"We expect the Fed to lay the groundwork for an upcoming taper announcement at this meeting, serving to confirm the reality of U.S. monetary policy divergence," analysts at Bank of America said in a note to clients.

But since the Fed met just six weeks ago, what had seemed a blue-sky setting for that debate has become clouded by a quadrupling of daily COVID-19 infections led by the more-contagious Delta variant to levels approaching those seen in last summer's coronavirus surge.

The yen gained as much as 0.4% to 110.11 yen per dollar. Sterling gained against the dollar and the euro as coronavirus infections in Britain receded. [GBP/]

The greenback is still up nearly 4% since May 25 as an improving U.S. economy bolstered the outlook for the Fed to start paring asset purchases as early as this year.

"With the dollar, you've had a pretty sizable rally," said Mazen Issa, senior FX strategist at TD Securities. "On a short-term cross-asset valuation base, it actually looks to be a bit rich against most of the G10, particularly against currencies that have more hawkish central bank pricing."

The Norwegian crown was up 0.56% against the greenback, while the Canadian dollar gained 0.1%.

In cryptocurrencies, Bitcoin was up nearly 13%, touching a more-than five-week high at just over $40,000, while ether gained 8.55% to $2,381.52 after London's City A.M. newspaper cited an unnamed insider as saying Amazon is looking to accept bitcoin payments by year-end.

The report followed Twitter boss Jack Dorsey's comment on Friday that the digital currency is a "big part" of the social media company's future.

(Reporting by John McCrank in New York; additional reporting by Ritvik Carvalho in London; Editing by Barbara Lewis, Will Dunham and Steve Orlofsky)

By John McCrank

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
EURO / JAPANESE YEN (EUR/JPY) 0.21% 129.807 Delayed Quote.1.89%
SQUARE, INC. -1.58% 262.5 Delayed Quote.22.55%
US DOLLAR / EURO (USD/EUR) 0.16% 0.853191 Delayed Quote.4.51%
Latest news "Economy & Forex"
04:32pKey events in Huawei CFO Meng Wanzhou's extradition case
04:31pHuawei CFO strikes agreement with U.S. over fraud charges, allowing her to leave Canada
04:27pTwo Fed policymakers say bar for taper met, nod to next debates
04:25pMaterials Tick Down As Traders Digest Fed's Taper Plans -- Materials Roundup
04:23pEnergy Up As Oil Futures Test Recent Highs -- Energy Roundup
04:14pFor the week, the s&p 500 rose 0.5%, the dow rose 0.6% and the nasdaq rose 0.02% (nasdaq rose 0.02%, not 0.0%)
04:10pDollar climbs as Evergrande uncertainty percolates
04:02pS&P 500 ends slightly up after bumpy week, but Nike drags
04:01pFor the week, the s&p 500 rose 0.5%, the dow rose 0.6% and the nasdaq rose 0.0%
04:00pS&P 500 ends slightly up after bumpy week, but Nike drags
Latest news "Economy & Forex"