US Dollar Stays Weak Amid Lack of Momentum in British Pound

13 April 2021 | Updated: 13 April 2021

The US dollar remained fairly weak yesterday, even though the yield on 10-year US bonds rose slightly, and the market’s attention turned to the CPI for March. Note that US CPI growth is expected to accelerate in March, and if that happens, it could heighten expectations of further inflationary pressures in the US economy, which will boost US yields.

In terms of monetary policy, it should be noted that Boston Fed President Rosengren said yesterday that the economy has recovered substantially, given adaptive monetary and fiscal policies, but still has a long way to go, especially in the labor market. On the other side of the Atlantic, the UK vaccination program is ongoing and the goal of offering the Covid vaccine to all people over 50 was reportedly met by mid-April.

At the same time, it should be noted that lockdowns have eased even further since yesterday as the UK allowed non-essential stores to reopen. We can see that investors will pay attention to the financial reports for February, especially the monthly GDP rates.

The outlook for GBP/USD remains unchanged amid a lack of momentum while the intraday outlook remains neutral. Some consolidation is possible, but the risk remains a downside as long as resistance at 1.3917 is held.
Amid Renewed Greenback Weakness USD/CAD Pair Gains
Earlier in the day, rising US Treasury yields supported the dollar, and the US Dollar Index (DXY) climbed to a session high of 92.32, with the 10-year US Treasury yield rising more than 1%.

However, the DXY reversed direction as the yield on 10-year Treasuries fell to negative territory after the US Bureau of Labor Statistics reported that the annual core CPI rose to 1.6% in March. While this figure was slightly above market expectations of 1.5%, it remained below the Fed’s target of 2% and hurt the US dollar. The DXY is currently down 0.1% to 92.00.

Earlier in the day, rising US Treasury yields supported the dollar, and the US Dollar Index (DXY) climbed to a session high of 92.32, with the 10-year US Treasury yield rising more than 1%.

During European trading hours, the USD/CAD pair climbed to a daily high of 1.2626 before falling in the second half of the day. The pair was nearly unchanged regularly at 1.2561 at the time of publishing.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.