NEW YORK (Reuters) – The dollar rose to a two-week high today Tuesday, offsetting some of its losses over a month, as risk appetite waned amid a decline in stocks and a rise in Treasury bonds, after US Treasury Secretary Janet Yellen said that interest rates may have to be raised to prevent growth. Inflationary in the United States economy.
Yellen’s comments coincided with the start of more economic investment programs launched by US President Joe Biden. But it also said that the additional spending is small compared to the size of the economy.
The dollar’s appeal as a safe haven was boosted by the Nasdaq decline of more than 2 percent, the Standard & Poor’s more than 1 percent and the less severe loss of the Dow Jones Industrial Average of 0.69 percent, and with the decline in Treasury yields.
Analysts suggested that a large part of the good news was already calculated in market prices.
“After a drastic improvement over the first quarter, the outlook for the US economy converged with reality, which means that the surprises are no longer positive,” said Carl Scamota, chief market analyst at Cambridge Global Payments in Toronto.
“For many investors and dealers under the influence of price trends, some rebalancing – away from risk sensitive currencies and towards safe havens – makes a lot of sense at this juncture,” he added.
Today’s recovery compensated for the dollar’s losses yesterday, Monday, after a disappointing report on the US industrial sector, as the currency rose 1 percent above its lowest level in a month recorded last week.
By 17.50 GMT, the dollar index, which measures the currency’s value against a basket of six other major currencies, was up 0.3 percent at 91.263, around the corner from a two-week peak. The index fell more than 2 percent in April.
The green currency advanced about 1 percent against the Australian and New Zealand dollars.
The euro fell 0.4 percent to $ 1.2016. The dollar rose 0.2 percent against the Japanese currency, to 109.32 yen.
The British pound fell 0.1 percent to $ 1.3881 ahead of the Bank of England meeting on Thursday, which may announce a slower pace of the bond-buying program as the British economy strengthens thanks to the vaccination distribution.
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