The US dollar on Friday lost ground as market participants favored currencies associated with risk-on sentiment over the safe-haven greenback.
Risk appetite was stoked by better-than-expected economic data and expectations that US President Joe Biden’s proposed US$1.9 trillion COVID-19 relief package would come to fruition.
“The dollar’s down against other currencies, but not by a whole lot,” said Oliver Pursche, president of Bronson Meadows Capital Management in Fairfield, Connecticut. “I expect the dollar to be where it is now at the end of the year, and the main reason for that is while I see some signs of improvement in the economy, monetary policy is going to stay where it is.”
Photo: AP
“I don’t think the dollar is underpriced or overpriced,” Pursche added.
For the week, the US dollar slid 0.2 percent against a basket of world currencies, the euro was essentially flat, and the yen lost more than 0.5 percent, but the British pound advanced more than 1.1 percent against the dollar, its best week since mid-December last year.
In Taiwan, the New Taiwan dollar yesterday remained unchanged to close at NT$28.338 against the US dollar.
Turnover totaled US$100 million during the trading session.
Meanwhile, bitcoin continues soar to record highs, hitting US$1 trillion in market capitalization.
Bitcoin and ethereum have gained about 89 percent and 1,420 percent respectively so far this year, leading some analysts to warn of a speculative bubble.
“One concern I’ve always had [about cryptocurrencies] is how susceptible they are to manipulation, but they’re going to continue to gain legitimacy,” Pursche said.
The Australian dollar, which is closely linked to commodity prices and the outlook for global growth, was up 1.3 percent at US$0.7870 on Friday, touching its highest since March 2018.
The New Zealand dollar also gained, closing in on a more than two-year high, and the Canadian dollar advanced as well.
Sterling, which often benefits from increased risk appetite, rose to an almost three-year high amid the UK’s vaccination program. It gained 0.26 percent to US$1.4012.
The euro showed little reaction to a slowdown in factory activity indicated by purchasing managers index data, rising 0.21 percent to US$1.2116.
The yen gained ground to ¥105.43 against the US dollar, creeping above its 200-day moving average for the first time in three days.
Additional reporting by CNA and staff writer
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