Asian session review: the dollar fell against major currencies

During today's Asian trading, the US dollar continued to decline and approached a two-week low against a basket of currencies, which was observed simultaneously with the retreat of treasury yields from recent peaks, despite signs of a sustained recovery in the US economy.

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell 0.38%.

The yen continued to recover from a more than one-year low of around 111 per dollar, briefly returning below 110 on Tuesday. The euro continued to rise from a near five-month low of about $ 1.17, and exceeded the level of $ 1.1800.

The US dollar has risen strongly this year, along with treasury bond yields, as investors bet on a faster recovery of the pandemic in the US than in other developed countries, amid massive stimulus and aggressive vaccinations.

But the dollar's fall this week even after Friday's much stronger-than-expected monthly employment data came out, followed on Monday by the highest service sector activity figures on record, which may indicate that most of the upbeat forecasts are being factored in for now.

However, Westpac strategists see room for further dollar gains, saying the series of strong data "reinforces the unmatched performance of the US dollar's recovery in growth."