The U.S. dollar rose on Wednesday from a sevenweek low hit overnight, as broad weakness in stock markets triggered by a resurgence of COVID19 cases in countries from India to Japan fuelled renewed appetite for the safehaven appeal of the greenback.
The safety bid also supported the Swiss franc and the Japanese yen as the outlook for the global economy soured.
The greenback has weakened more than 2 in April after a strong March rally as investors bet that a global economic recovery premised on a speedy rollout of vaccines would fuel demand for nondollar currencies like the euro and the Aussie.
The dollar index, which tracks the U.S. currency against six major peers, was up 0.11 at 91.321 in London trading after slumping as low as 90.856 on Tuesday for the first time since March 3.
The greenbacks bounce was also accompanied by softer U.S. Treasury yields as investors weighed the surge in COVID19 cases against a broadbased selloff in the U.S. dollar in recent weeks despite strong U.S. employment and retail sales data.
Thu Lan Nguyen, a strategist at Commerzbank said more positive U.S. data could easily kickstart another dollar rally, particularly if the uneven pace of vaccinations fuels greater demand for U.S. Treasuries as a hedge against a crisis.
So for now, U.S. dollar bears should make sure that they dont get excited too soon, she said in a note.
The benchmark 10year Treasury yield was around 1.58, not far from its lowest since midMarch, as it continued to…