By Ritvik Carvalho
LONDON, Jan 27 (Reuters) – The dollar rose on Wednesday against a basket of currencies as markets awaited comments from Federal Reserve Chairman Jerome Powell, who will likely renew his commitment to an ultra-flexible policy at the close later in the month. day of a meeting of the central bank of the United States.
* The greenback reversed its devaluation against riskier currencies, even as hopes for a recovery from the pandemic grew after the update of the International Monetary Fund forecasts for global growth in 2021.
* Yields on U.S. Treasury bonds, whose rise supported the dollar earlier this year, fell in early morning trading amid caution over the final size and delays in the 1.9 fiscal stimulus plan. trillion dollars from President Joe Biden.
* The dollar index rose 0.1% to 90.284 on Wednesday during the European session, after a 0.2% drop the day before. The measurement has been consolidating since it sank to 89,206 in early January, a nearly three-year low.
EURO / DOLLAR = ECB / EDF?
* The euro depreciated 0.1% at $ 1.2146.
* Analysts said Tuesday’s reports that the European Central Bank was studying whether differences with Fed policy are boosting the euro – part of a broader review of financial conditions, would not have a concrete effect on the currency.
* It’s “probably one of those headlines where it’s a buy at the time of the euro / dollar crash,” said Jordan Rochester, currency strategist at Nomura. Rochester was long on the euro / dollar spot exchange rate, with a target of $ 1.25 by the end of March.
* ECB President Christine Lagarde has repeatedly said that the central bank is closely watching the exchange rate of the single currency.
* “We suspect that they might find that higher inflation is more credible in the United States and that the euro / dollar spot is more related to the global manufacturing sector (which is doing well), not European services,” said Lars Sparresø Merklin, Senior Analyst at Danske Bank.
* “Either way, this is in addition to a growing number of countries that seem uncomfortable with the weakness of the US dollar.”
GRAPH (in English): Projections of the Federal Open Market Committee https://tmsnrt.rs/3a2U7fw
Exchange rates in the world https://tmsnrt.rs/2RBWI5E
(Reporting by Ritvik Carvalho; Edited in Spanish by Janisse Huambachano)