FOREX-Dollar gains as U.S. growth seen likely to outperform

  • 3/3/2021
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* Graphic: World FX rates tmsnrt.rs/2RBWI5E (New throughout, updates prices, changes byline, dateline; previous LONDON) By Karen Brettell NEW YORK, March 3 (Reuters) - The dollar gained on Wednesday as investors priced for strong U.S. growth relative to other regions, while the safe haven Japanese yen continued to weaken to a seven-month low. Investors have boosted bets on U.S. growth and inflation as the government prepares new fiscal stimulus, and speculation is rising that the Federal Reserve could also be closer to normalizing monetary policy than previously expected. "What the market is looking at today are growth differentials between a recovering U.S. and more of a sputtering Europe," said Joe Manimbo, senior market analyst at Western Union Business Solutions, in Washington. Data on Wednesday showed that the euro zone economy is almost certainly in a double-dip recession as COVID-19 lockdowns continue to hammer the services industry. U.S. data also showed that private payrolls rose by 117,000 jobs last month, according to the ADP National Employment Report, missing expectations. However, "expectations are for stronger hiring" when the U.S. releases jobs data for February on Friday, Manimbo said. The dollar index was last up 0.22% at 90.997. The euro dipped 0.30% to $1.2054. The U.S. currency has also benefited from a rise in U.S. Treasury yields. Benchmark 10-year yields on Wednesday rose to 1.481%, though they are below a one-year high of 1.614% reached last week. Comments by Federal Reserve Chairman Jerome Powell on Thursday will be closely evaluated for any indications that the Fed is uncomfortable with the recent yield increases. He is speaking at an event on the U.S. economy. Riskier currencies including the Australian dollar dipped as stocks fell, indicating worsening risk sentiment. The Aussie was last down 0.57% at $0.778. It has fallen from a three-year high of $0.8007 last week. Meanwhile the safe haven Japanese yen continued to weaken, falling as far as 107.08 yen, the weakest since July 23. The British pound was last down 0.06% on the day at $1.3950 after British finance minister Rishi Sunak said that Britain"s government would borrow significantly more in the coming financial year than thought just a few months ago. Sunak said the economy would regain its pre-pandemic size in the middle of 2022, six months earlier than previously forecast, helped by Europe"s fastest COVID-19 vaccination program. ======================================================== Currency bid prices at 9:45AM (1445 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index 90.9970 90.8110 +0.22% 1.129% +91.0620 +90.6260 Euro/Dollar $1.2054 $1.2091 -0.30% -1.33% +$1.2114 +$1.2043 Dollar/Yen 107.0750 106.7450 +0.17% +3.52% +107.0750 +106.7000 Euro/Yen 129.07 128.99 +0.06% +1.69% +129.4500 +128.7500 Dollar/Swiss 0.9179 0.9145 +0.39% +3.77% +0.9188 +0.9140 Sterling/Dollar $1.3950 $1.3963 -0.06% +2.14% +$1.4005 +$1.3939 Dollar/Canadian 1.2648 1.2636 +0.10% -0.67% +1.2657 +1.2594 Aussie/Dollar $0.7776 $0.7821 -0.57% +1.09% +$0.7838 +$0.7770 Euro/Swiss 1.1063 1.1053 +0.09% +2.37% +1.1086 +1.1055 Euro/Sterling 0.8637 0.8660 -0.27% -3.36% +0.8667 +0.8623 NZ $0.7248 $0.7292 -0.53% +1.00% +$0.7303 +$0.7246 Dollar/Dollar Dollar/Norway 8.4950 8.4735 +0.19% -1.14% +8.5215 +8.4420 Euro/Norway 10.2360 10.2430 -0.07% -2.18% +10.2653 +10.2100 Dollar/Sweden 8.4051 8.3780 +0.03% +2.55% +8.4196 +8.3570 Euro/Sweden 10.1275 10.1247 +0.03% +0.51% +10.1420 +10.1090 (Reporting by Karen Brettell; Editing by Alex Richardson)

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