The U.S. dollar is the most recognizable currency in the world, and this fact once more highlights its importance. Interestingly, the dollar traded near multi-month highs against most major currencies on March 26. It is worth mentioning that, a wave of optimism over improving the U.S. economic data, the rollout of coronavirus vaccines as well as rising Treasury yields helped to boost the dollar.
Moreover, the euro rebounded a little bit ahead of data on German business sentiment due later on the day. However, the outlook for the euro soured. This is due to renewed coronavirus lockdowns and the slow pace of vaccinations across the European Union.
People should keep in mind that, the greenback has more room to rise against the euro. Nevertheless, its gains against other currencies in the past few weeks have been so rapid that some analysts are warning against chasing the dollar higher from current levels.
Interestingly, the euro broke through the 200-day moving average. Moreover, that is a clear sign that it will continue to go lower. It is worth noting that, against the euro, the greenback fell to $1.1778. However, it was still near its strongest level since November last year.
Dollar and other major currencies
Interestingly, the dollar rose to 109.25 yen, which is near its highest since June. Moreover, the U.S. dollar traded at 0.9399 Swiss franc, holding onto a 0.5% that it gained in the previous session.
It is worth mentioning that, one notable exception to the dollar’s gains was the British pound. The pound edged up to $1.3762. As a reminder, it rose 0.4% on Thursday. This is not the end of the story as another factor has the potential to influence the pound. Importantly, data due on Friday that is forecast to show a rebound in British retail sales could give the pound a further boost.
As a reminder, the dollar index against a basket of six major currencies stood at 92.769, close to a four-month high. For the week, the index was on track for a 0.9% gain.
It is worth noting that, Australian and New Zealand dollars rebounded from sharp losses earlier in the week. Furthermore, the two currencies are likely to remain supported because of their relative success in limiting the economic fallout created by the coronavirus pandemic.
Unfortunately, many countries around the world are struggling to solve issues caused by the pandemic. It won’t be easy to return to pre-coronavirus results in a short period of time due to the sheer number of challenges.