Dollar gains, gains from rally in equity markets

(New York) The dollar rose against most major currencies on Tuesday, supported by a rally on Wall Street after a sharp fall on Monday.

At around 2:45 pm, the dollar was up against the Canadian dollar, trading at CAD $1.2676, slightly higher than yesterday’s CAD $1.2754.

The US dollar rose 0.14% against the euro to $1.1783 per euro, close to its highest level since early April.

The greenback also appreciated against the pound sterling, reaching higher levels seen since early January, at $1.3629 per pound, as well as against the yen.

In recent days, many analysts have looked at the dollar’s rebound, a time neglected by the maintenance of a friendly discourse by the US central bank (Fed), depicting a flight towards safe haven, against the backdrop of a resurgence of the coronavirus.

But for currency analyst Mazen Issa at TD Securities, the US currency’s good performance on Tuesday was explained by gains in Wall Street, which were anchored well in the green after a stall on Monday.

“One of the outstanding events of the pandemic was the very close relationship between the currency and equity markets”, explained the expert. The link had loosened at the beginning of the month, but it is in the process of re-emerging.

Another element of support, a rise in US bond rates after several days of declines, higher yields attracting more foreign investment and favoring the national currency.

The dollar was also helped by the prospect of a meeting of the European Central Bank’s (ECB) governing council on Thursday, where analysts expect a liberal speech.

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Maintaining a liberal monetary policy by the ECB removes the possibility of interest rate hikes and does not support a single currency.

The British pound is suffering from a certain fever on the part of operators regarding the economic situation in the United Kingdom, which has imposed almost all final health restrictions and where coronavirus cases are on the rise.

“(variant) Delta pressure, in the spotlight, should orient the scope of recent comments by members of the Bank of England more toward monetary tightening” and narrow it down to a minority of central bankers, predictably, note in one , Joe Manimbo of Western Union.

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