Backed by a wave of optimism due to improving US economic data, the spread of coronavirus vaccines and rising Treasury yields, the dollar is trading near monthly highs against most major currencies.
The euro was centered before the data on German business sentiment, but the outlook for the common European currency has deteriorated due to new locks from the coronavirus and the slow pace of vaccines throughout the European Union.
The dollar has more room to rise against the euro, but its gains against other currencies in recent weeks have been so rapid that some analysts are warning against chasing the dollar above current levels.
“The euro broke the 200-day moving average, which is a clear sign that it will continue to fall,” said Minori Uchida, head of global market research at MUFG Bank in Tokyo.
“The yen is strengthening in some crosses, which will limit the dollar / yen. Yields supported the dollar, but the power of this move may start to wear off. “
Against the euro, the dollar was trading at $ 1.1776, close to its strongest level since November last year. The dollar was at 109.21 yen, close to its highest level since June.
In the US, jobless claims fell to a one-year low last week, and President Biden said he would double the vaccination plan after hitting the previous vaccination goal of 100 million injections 42 days before the programmed, which supports the optimism in the dollar. .
The dollar index against six capital baskets reached 92,788, a four-month high.
Investors will analyze US personal consumption data on Friday for more clues about the strength of the US economy.
Germany’s Ifo survey is expected to show improvement in business morale during European trade. However, this is unlikely to halt the euro’s slide, as concerns about the European Union’s slow application of vaccines and disputes with former member Great Britain over vaccine exports have become a dominant theme. .