Dollar wobbles as investors grow anxious about pandemic toll on U.S. economy

August 03, 2020, 11.52 AM | Source: Reuters
Dollar wobbles as investors grow anxious about pandemic toll on U.S. economy

ILUSTRASI. U.S. dollar and Euro notes


RATE DOLLAR - TOKYO. The U.S. dollar gave up brief early gains on Monday as mounting concerns about a slowing U.S. economic recovery from the coronavirus pandemic hobbled the currency after a brief rebound late last week.

The euro traded almost unchanged at $1.1768, coming off a low of $1.1741 touched earlier in the session, though it is still more than a cent below Friday's two-year high of $1.1908.

The common currency hit a speed bump on some technical signs of being over-bought in the near-term, and with speculators' long positions hitting a record level, said Minori Uchida, chief currency analyst at MUFG Bank.

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"But the dollar's decline is likely to continue. Real U.S. interest rates are declining even as the country is running a big current account deficit, a situation we hadn't have for a long time," he said.

U.S. bond yields have fallen to their lowest level since the pandemic-induced market turmoil in March, with the 10-year rate slipping to near 0.50%, undermining the yield attraction of the dollar.

U.S. bonds looked even less attractive when adjusted for inflation expectations, with the yield on inflation-protected U.S. 10-year Treasuries falling to a record low below minus 1%.

The dollar changed hands at 105.90 yen, giving up early gains to 106.44, which traders saw as an extension of Friday's rebound from 4-1/2-month lows of 104.195 triggered in part by month-end buying.

Editor: Anna Suci Perwitasari

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