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Dollar firms from 7-week lows as risk appetite fades

04/21/2021 | 04:19am EDT

* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

LONDON, April 21 (Reuters) - The U.S. dollar firmed on Wednesday, rising from a seven-week low hit overnight, as broad-based weakness in stock markets triggered by a resurgence of COVID-19 cases in countries from India to Japan fuelled renewed appetite for the greenback.

The safety bid also supported the Swiss franc and the Japanese yen as the outlook for the global economy soured.

The dollar index, which tracks the U.S. currency against six major peers, was up 0.14% at 91.347 in early London trading after slumping as low as 90.856 on Tuesday for the first time since March 3. It has declined 2.4% so far this month.

The greenback's bounce was also accompanied by softer U.S. Treasury yields as investors weighed the surge in COVID-19 cases against a broad-based selloff in the U.S. dollar in recent weeks despite strong U.S. employment and retail sales data.

Thu Lan Nguyen, a strategist at Commerzbank said more positive U.S. data could easily kick-start another dollar rally, particularly if the uneven pace of vaccinations fuels greater demand for U.S. Treasuries as a hedge against a crisis.

"So for now, U.S. dollar bears should make sure that they don’t get excited too soon," she said in a note.

The benchmark 10-year Treasury yield was around 1.58%, not far from its lowest since mid-March, as it continued to consolidate following its retreat from the 14-month high at 1.7760% reached at the end of last month.

The euro was down 0.25% at $1.2000, after touching a seven-week high of $1.2079 overnight.

The European Central Bank decides policy on Thursday, with the Federal Reserve following next week.

Declines in U.S. yields and the dollar in April have come as evidence mounted that the Fed would be slower in tightening monetary policy than it had appeared to the market.

Broadly, pandemic developments triggered investor caution.

India reported 1,761 deaths from COVID-19, its highest daily toll, while Canada and the United States extended a land-border closure for non-essential travellers

The Australian dollar, a barometer for risk appetite, nursed losses at $0.7717 after weakening 0.4% overnight.

In cryptocurrencies, bitcoin traded around $55,000, consolidating following its dip to as low as $51,541.16 on Sunday. It set a record high at $64,895.22 on April 14.

(Reporting by Saikat Chatterjee; Editing by Barbara Lewis)

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / CANADIAN DOLLAR (AUD/CAD) -0.10% 0.93564 Delayed Quote.-4.20%
AUSTRALIAN DOLLAR / EURO (AUD/EUR) -0.12% 0.6354 Delayed Quote.1.03%
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) -0.08% 84.832 Delayed Quote.6.48%
AUSTRALIAN DOLLAR / NEW ZEALAND DOLLAR (AUD/NZD) -0.12% 1.07838 Delayed Quote.0.85%
AUSTRALIAN DOLLAR / SWISS FRANC (AUD/CHF) -0.09% 0.69311 Delayed Quote.1.64%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.12% 0.7704 Delayed Quote.0.17%
BITCOIN - EURO 0.04% 33482.34 Real-time Quote.35.84%
BITCOIN - UNITED STATES DOLLAR -0.03% 40591.77 Real-time Quote.34.53%
BRITISH POUND / AUSTRALIAN DOLLAR (GBP/AUD) 0.13% 1.83161 Delayed Quote.3.15%
BRITISH POUND / EURO (GBP/EUR) 0.02% 1.16419 Delayed Quote.4.19%
BRITISH POUND / SWISS FRANC (GBP/CHF) 0.05% 1.2691 Delayed Quote.4.86%
BRITISH POUND / US DOLLAR (GBP/USD) 0.01% 1.411 Delayed Quote.3.23%
CANADIAN DOLLAR / AUSTRALIAN DOLLAR (CAD/AUD) 0.11% 1.068913 Delayed Quote.4.39%
CANADIAN DOLLAR / EURO (CAD/EUR) -0.02% 0.67926 Delayed Quote.5.52%
CANADIAN DOLLAR / SWISS FRANC (CAD/CHF) 0.03% 0.74073 Delayed Quote.6.29%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.01% 0.82323 Delayed Quote.4.69%
CHINESE YUAN RENMINBI / SWISS FRANC (CNY/CHF) -0.05% 0.140487 Delayed Quote.3.48%
COMMERZBANK AG -1.38% 6.43 Delayed Quote.22.10%
DANISH KRONE / SWISS FRANC (DKK/CHF) 0.37% 14.615 Delayed Quote.0.98%
DOW JONES FXCM DOLLAR INDEX -0.01% 11742.31 Delayed Quote.0.54%
EURO / AUSTRALIAN DOLLAR (EUR/AUD) 0.12% 1.57331 Delayed Quote.-0.99%
EURO / SWISS FRANC (EUR/CHF) 0.04% 1.09055 Delayed Quote.0.59%
EURO / US DOLLAR (EUR/USD) 0.01% 1.21219 Delayed Quote.-0.86%
HONGKONG-DOLLAR / SWISS FRANC (HKD/CHF) 0.03% 11.589 Delayed Quote.1.31%
INDIAN RUPEE / AUSTRALIAN DOLLAR (INR/AUD) 0.12% 0.017738 Delayed Quote.-0.46%
INDIAN RUPEE / EURO (INR/EUR) 0.04% 0.011273 Delayed Quote.0.62%
INDIAN RUPEE / SWISS FRANC (INR/CHF) 0.02% 0.012292 Delayed Quote.1.23%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.00% 0.013665 Delayed Quote.-0.28%
JAPANESE YEN / SWISS FRANC (JPY/CHF) -0.04% 0.817 Delayed Quote.-4.60%
NEW ZEALAND DOLLAR / SWISS FRANC (NZD/CHF) 0.03% 0.64265 Delayed Quote.0.86%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.02% 0.71435 Delayed Quote.-0.58%
RUSSIAN ROUBLE / SWISS FRANC (RUB/CHF) 0.10% 0.012503 Delayed Quote.4.38%
SINGAPORE-DOLLAR / SWISS FRANC (SGD/CHF) 0.03% 0.678 Delayed Quote.1.11%
SWEDISH KRONA / SWISS FRANC (SEK/CHF) -0.01% 0.108081 Delayed Quote.0.36%
US DOLLAR / AUSTRALIAN DOLLAR (USD/AUD) 0.10% 1.298044 Delayed Quote.-0.19%
US DOLLAR / EURO (USD/EUR) -0.01% 0.824953 Delayed Quote.0.88%
US DOLLAR / SWISS FRANC (USD/CHF) 0.04% 0.89962 Delayed Quote.1.45%
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