Dollar sits near multi-week lows on dovish Fed policy
The dollar hovered near nine-week lows on Thursday as a dovish outlook from the Federal Reserve and bold spending plans from the White House gave way for the global reflation trade.
President Joe Biden pushed for another $1.8 trillion in spending, risking expanding the U.S. budget and trade deficits, which could impact the dollar.
The euro climbed to $1.2149, its highest since late February, before steadying to $1.2134. The trendline resistance’s break at $1.2114 opened the path to bull targets at $1.2196 and $1.2242.
The dollar dropped to a three-year low of 1.2287 against the loonie. Against the Norwegian crown, the dollar fell to 8.1460, its weakest since October 2018.
The crown benefited from rising oil prices as the global pandemic recovery lifted demand for commodities, a trend that also proved advantageous to the Aussie and kiwi.
The dollar slid back to 108.55 against the yen, compared to its Wednesday’s high of 109.07. The dollar index lingered near a nine-week low of 90.543, several levels below the rally peak of 93.439 reached end-March.