FOREX-Dollar set for best week in three months as pandemic recoveries diverge - Reuters

    * Graphic: World FX rates tmsnrt.rs/2RBWI5E

    By Kevin Buckland
    TOKYO, Feb 5 (Reuters) - The dollar headed for its best
weekly gain in three months, lifted by growing confidence that
the U.S. economic recovery will outpace global peers.
    The dollar index was just shy of the two-month high
reached overnight amid signs of resilience in the labour market,
with closely watched nonfarm payroll figures due Friday.

    "The U.S. economy is exceptionally strong relative to other
countries, causing dollar short covering," said Tohru Sasaki,
J.P. Morgan's head of Japan market research in Tokyo, pointing
to employment and manufacturing indicators as well as the pace
of vaccinations.
    The current bout of dollar strength could continue for
"several weeks," he said, but the picture is murkier thereafter
as Europe and Asia catch up with immunizations and the Federal
Reserve's continued ultra-easy monetary policy caps a rise in
long-term U.S. yields.
     The dollar index was little changed at 91.529 early in the
Asian session after climbing every day so far this week, and
touching 91.581 on Thursday for the first time since Dec. 1.
    The gauge is on track for a 1.1% weekly advance, the most
since Nov. 1, building on a 0.3% rise the previous week.
    The greenback got support from a rise in longer-term U.S.
Treasury yields, which came as traders positioned for a massive
fiscal spending package.
    Democrats in the U.S. Senate were poised for a marathon
"vote-a-rama" session aimed at overriding Republican opposition
to President Joe Biden's $1.9 trillion COVID-19 relief proposal.

    Analysts and investors are weighing whether dollar strength
this year is a temporary position adjustment after a 7% drop for
the dollar index in 2020, or a longer-lasting shift away from
dollar pessimism.
    There are potentially a lot of dollar shorts to cover,
particularly against the yen, where hedge funds had racked up
their biggest bearish bets since 2016.
    The dollar was little changed at 105.585 yen on Friday after
earlier pushing as high as 105.70 for the first time since Oct.
20.
    The euro was mostly flat at $1.1966, maintaing its first
move below $1.20 since Dec. 1 from overnight.
    Westpac strategists see Europe's vaccine rollout
accelerating by the end of this quarter, which, coupled with the
Fed's commitment to ultra-loose monetary policy, will put
pressure back on the dollar.
    "DXY upside potential is living on borrowed time," they
wrote in a note, referring to the dollar index. "Sell DXY into
92."
    

========================================================
    Currency bid prices at 8:54AM (054 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  !RIC           !RIC        !RIC           !RIC        !RIC        !RIC
                              {EUR=EBS} is   {EUR=EBS}   {EUR=EBS} is   {EUR=EBS}   {EUR=EBS}   {EUR=EBS}
                              invalid        is invalid  invalid%       is          is invalid  is invalid
                                                                        invalid%                
 Dollar/Yen                   105.5320       105.5400    +0.00%         +2.18%      +105.6270   +0.0000
 Euro/Yen                     126.31         126.25      +0.05%         -0.48%      +126.3900   +126.2500
 Dollar/Swiss                 !RIC           !RIC        !RIC           !RIC        !RIC        !RIC
                              {CHF=EBS} is   {CHF=EBS}   {CHF=EBS} is   {CHF=EBS}   {CHF=EBS}   {CHF=EBS}
                              invalid        is invalid  invalid%       is          is invalid  is invalid
                                                                        invalid%                
 Sterling/Dollar              1.3682         1.3673      +0.08%         +0.16%      +1.3687     +1.3673
 Dollar/Canadian              1.2823         1.2824      +0.00%         +0.71%      +1.2825     +1.2816
 Aussie/Dollar                0.7598         0.7601      -0.01%         -1.20%      +0.7608     +0.7596
 NZ                           0.7156         0.7157      +0.03%         -0.31%      +0.7164     +0.7154
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ 

    
 (Reporting by Kevin Buckland. Editing by Gerry Doyle)
  

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https://www.reuters.com/article/global-forex/forex-dollar-set-for-best-week-in-three-months-as-pandemic-recoveries-diverge-idUSL4N2KB037

2021-02-05 00:56:06Z
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