Dollar Attempts To Extend Rally, Focus On Fed Speech

Dollar Attempts To Extend Rally, Focus On Fed Speech

05 May 2021 07:29 AM

The USDINR NDF is currently trading at 73.77/78.

The dollar tried to extend a rally today as talk about the possibility of higher U.S. interest rates and a sell-off in tech stocks soured risk sentiment to the benefit of the safe-haven currency.

The bounce was partly sparked by comments from U.S. Treasury Secretary Janet Yellen that rate hikes may be needed to stop the economy overheating.

Rumpeltin noted that over the last 10 years, the dollar had averaged gains against each of its G10 counterparts in May.

Three more Fed officials are speaking later today providing the opportunity for further market-moving comments.

Trading was limited in Asia with Japan and China on holiday. Australia's S&P/ASX200 had risen 0.6% and Hong Kong had climbed 0.7% in thin Asian trading due to holidays in both China and Japan.

Against a basket of major currencies, the dollar inched higher to 91.282 and away from a recent two-month low of 90.422. The dollar was steady on the yen at 109.31.

Brent crude futures settled up $1.32 at $68.88 a barrel, while US crude futures rose $1.20 to settle at $65.69 a barrel.

One drag for the dollar is the U.S. trade deficit, which expanded to a record $74.4 billion in March.