Dollar Edges Higher Overall

FxPremiere.com – Forex Signals | The dollar edged higher in Europe Friday, but was still heading for a lower week as traders made bets on an economic recovery from the Covid-19 pandemic.

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Forex Signals Dollar Heads Higher Sterling Slips

The dollar has been caught in a tug-of-war over the last few weeks. Dollar Weakens Further

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Joe Biden was sworn in as the 46th president of the United States on Wednesday, and traders are seeing the change in administration as increasing the chances of increased stimulus given the incoming president has already proposed a $1.9 trillion Covid-19 relief bill. Dollar Edges Lower Ahead

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However, the idea of greater borrowing to fund this additional stimulus and what this could mean to inflation and the Federal Reserve’s ultra loose monetary stance resulted in rising U.S. Treasury yields, helping the dollar.

That said, Thursday’s weekly jobless claims number fell only slightly last week, following on from the weak nonfarm payrolls figure earlier in the month. This signaled pandemic-related strains in the U.S. labor market remain, and the Federal Reserve will remain accommodative for some time.

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Elsewhere, EUR/USD dropped 0.1% to 1.2159, but the pair is still up around 0.7% this week. Dollar Edges Lower Brexit

The European Central Bank held interest rates unchanged on Thursday, as widely expected given it delivered a hefty easing package only in December. Forex Signals – Dollar Edges Higher

“The main focus was on the comments on the currency,” said ING analyst Petr Krpata, noting that ECB President Christine Lagarde added that the central bank is ‘’very attentive’’ to foreign exchange developments.

“While we don’t rule out further verbal interventions or even a policy reaction in response to currency strength, for this to happen the euro would have to strengthen sharply and meaningfully first.”

Dollar Edges Higher Overall