Forex Today: Dollar and cryptos extend decline, virus and infrastructure news eyed
Here is what you need to know on Tuesday, April 20:
Markets are calm after a decline on Monday but the dollar remains depressed. Mixed news about the virus and US infrastructure are eyed, while cryptocurrencies extend their decline.
The US dollar is on the back foot for the second consecutive day, with EUR/USD changing hands at around 1.2060, the highest since early March. The greenback's decline comes despite an uptick in US Treasury yields. Returns on benchmark ten-year bonds are around 1.60%.
The market mood is relatively calm, yet Wall Street ended Monday's session with moderate falls, not gains. Earnings season is in full swing.
US President Joe Biden hosted members of Congress from both parties in an attempt to garner support for his infrastructure spending programs. Statements coming after the encounter have shown an upbeat mood but no substantial progress.
GBP/USD has managed to take advantage of dollar weakness to peek above 1.40 with Britain's successful vaccination campaign also helping. The UK's jobs figures are set to show a minor increase in the Unemployment Rate from 5% to 5.1%.
Gold is trading around $1,770, consolidating its gains from previous days and weathering the increase in US yields.
Chinese President Xi Jinping has warned the US not to "boss around" and also cautioned against trade decoupling. He committed his country, the world's second-largest economy to fighting climate change.
Commodity currencies are big beneficiaries, with AUD/USD advancing toward 0.78 despite minutes from the Reserve Bank of Australia stating that the jobless rate remains too high.
Coronavirus: India has continued suffering record daily infection levels above 270,000, weighing on the local stock market and on the rupee. In the US, cases are flattening after several days of gains, potentially showing that the immunization campaign is bearing fruit. Some 40% of Americans have received at least one jab.
Cryptocurrencies have been extending their losses, with Bitcoin pressured around $55,000 and Ethereum suffering its sixth consecutive down day, changing hands at around $21,40. Analysts see the drop as a healthy correction. XRP is around $1.30 and Dogecoin, which started as a joke, is already worth some $54,000.
The pause that refreshes: Are currency markets hesitant to run with US data?