From Peter Nurse
Investing.com – The dollar shed some gains in early European trading on Wednesday as bond yields slid from their highs, but remained in demand as fiscal stimulus and aggressive vaccine adoption fuel a strong economic rebound in the US.
At 3:15 a.m.CET (0815 GMT), the greenback fell 0.1% against a basket of six other currencies to 93.240 after previously hitting a new 4-month high of 93.472.
rose 0.4% to 110.74 and rose 0.1% to 1.1726. rose 0.1% to 1.3746 after UK GDP rose 1.3% from the previous three-month period between October and December last year, compared to an earlier estimate of 1.0% growth, while the risk-sensitive rose by 0 .2% rose to 0.7610.
The dollar's decline is due to US yields struggling to maintain new highs. The benchmark was just above 1.72% and traded above 1.78% on Tuesday.
That drop in yields is likely to be just a profit-taking period, however, as the data continues to point to the underlying strength of the US economy.
Tuesday's index rose to 109.7 in March, its highest level since the pandemic began, and that increased confidence is expected to be reflected in the March U.S. employment report released on Friday.
Before that comes the dates for March, which are due later on Wednesday.
This US economic strength is one of the reasons the International Monetary Fund will improve its forecast for global economic growth next week, managing director Kristalina Georgieva said Tuesday after January's forecast of 5.5%.
That said, "The most important event of the week will be President Biden's unveiling of his infrastructure plan on Wednesday his report on the US state of emergency in economic recovery," ING analysts said in a note.
Elsewhere, it fell 0.2% to 6.5577 after the Chinese purchasing managers' index for March was 51.9, up from 50.6 in February. The PMI stood at 56.6, beating its February reading of 51.4.
Caixin's private sector PMIs for manufacturing and services are due later in the week.
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