The US dollar continued its solid run yesterday, reaching its best levels against the euro since November 2020, and retesting recent lows around $1.37 against the pound. A combination of impressive economic data and a robust vaccine program are rejuvenating confidence in the world’s reserve currency.
The path forward for the buck is not a simple one though. The Federal Reserve will pose a large threat to the buck throughout the remainder of this year. Their accommodative monetary policy stance should provide a strong headwind which may become a problem if the economic recovery does begin to falter at some stage. However, for the moment, the US dollar is riding high and marching forward in style.
There’s a busy data docket today, including eurozone flash CPI, US ADP employment and pending home sales, and speeches from Christine Lagarde & President Biden.
8:15am, March 31st 2021
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