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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% 0.94092 Delayed Quote.-3.92%
AUSTRALIAN DOLLAR / EURO (AUD/EUR) 0.17% 0.6405 Delayed Quote.1.53%
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) 0.62% 85.093 Delayed Quote.6.50%
AUSTRALIAN DOLLAR / NEW ZEALAND DOLLAR (AUD/NZD) -0.29% 1.07237 Delayed Quote.0.47%
AUSTRALIAN DOLLAR / SWISS FRANC (AUD/CHF) 0.14% 0.70068 Delayed Quote.2.78%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.73% 0.77796 Delayed Quote.0.37%
BITCOIN - EURO 3.82% 40270.22 Real-time Quote.74.55%
BITCOIN - UNITED STATES DOLLAR 4.05% 48897.89 Real-time Quote.73.11%
BRITISH POUND / AUSTRALIAN DOLLAR (GBP/AUD) -0.40% 1.81114 Delayed Quote.2.42%
BRITISH POUND / EURO (GBP/EUR) -0.24% 1.1602 Delayed Quote.3.94%
BRITISH POUND / SWISS FRANC (GBP/CHF) -0.15% 1.27063 Delayed Quote.5.28%
BRITISH POUND / US DOLLAR (GBP/USD) 0.34% 1.40928 Delayed Quote.2.72%
CANADIAN DOLLAR / AUSTRALIAN DOLLAR (CAD/AUD) 0.00% 1.06279 Delayed Quote.4.06%
CANADIAN DOLLAR / EURO (CAD/EUR) 0.00% 0.680429 Delayed Quote.5.72%
CANADIAN DOLLAR / SWISS FRANC (CAD/CHF) -0.05% 0.74393 Delayed Quote.7.16%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.00% 0.8256 Delayed Quote.4.64%
CHINESE YUAN RENMINBI / SWISS FRANC (CNY/CHF) 0.00% 0.139984 Delayed Quote.3.52%
COMMERZBANK AG 3.65% 6.496 Delayed Quote.23.36%
DANISH KRONE / SWISS FRANC (DKK/CHF) -0.29% 14.67 Delayed Quote.1.95%
DOW JONES FXCM DOLLAR INDEX -0.28% 11710.3 Delayed Quote.0.30%
EURO / AUSTRALIAN DOLLAR (EUR/AUD) -0.21% 1.56032 Delayed Quote.-1.46%
EURO / SWISS FRANC (EUR/CHF) 0.03% 1.09431 Delayed Quote.1.22%
EURO / US DOLLAR (EUR/USD) 0.57% 1.21451 Delayed Quote.-1.12%
HONGKONG-DOLLAR / SWISS FRANC (HKD/CHF) -0.51% 11.602 Delayed Quote.2.15%
INDIAN RUPEE / AUSTRALIAN DOLLAR (INR/AUD) 0.00% 0.017553 Delayed Quote.-0.98%
INDIAN RUPEE / EURO (INR/EUR) 0.00% 0.011239 Delayed Quote.0.58%
INDIAN RUPEE / SWISS FRANC (INR/CHF) 0.00% 0.012307 Delayed Quote.1.79%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.00% 0.013655 Delayed Quote.-0.55%
JAPANESE YEN / SWISS FRANC (JPY/CHF) -0.41% 0.8238 Delayed Quote.-3.51%
NEW ZEALAND DOLLAR / SWISS FRANC (NZD/CHF) 0.46% 0.65354 Delayed Quote.2.38%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.95% 0.72495 Delayed Quote.0.03%
RUSSIAN ROUBLE / SWISS FRANC (RUB/CHF) 0.00% 0.012197 Delayed Quote.2.25%
SINGAPORE-DOLLAR / SWISS FRANC (SGD/CHF) -0.49% 0.6759 Delayed Quote.1.46%
SWEDISH KRONA / SWISS FRANC (SEK/CHF) 0.00% 0.108233 Delayed Quote.0.09%
US DOLLAR / AUSTRALIAN DOLLAR (USD/AUD) 0.00% 1.285413 Delayed Quote.-0.40%
US DOLLAR / EURO (USD/EUR) -0.56% 0.823377 Delayed Quote.1.13%
US DOLLAR / SWISS FRANC (USD/CHF) -0.52% 0.90123 Delayed Quote.2.38%
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