The dollar hit a fresh fourmonth high against the euro on Thursday as the U.S. pandemic response continued to outpace Europes, which has been hobbled by extended lockdowns and delayed vaccine rollouts.
The safehaven greenback held on to most of a broad twoday advance, which has been fuelled by worries ranging from Europes third COVID19 wave and potential U.S. tax hikes to the persistent spectre of inflation.
Even Germanys reversal of a call for a strict lockdown over the Easter period did little to build confidence in the regions economic outlook, instead compounding discontent with Chancellor Angela Merkels handling of the pandemic.
The weak point in Europe remains around the vaccine rollout amid the rise in new virus cases and the tightening of restrictions … which likely means the mooted acceleration in Q2 may have to be pushed back by a quarter, Tapas Strickland, director of economics and markets at National Australian Bank, wrote in a client note.
The narrative of the U.S. outperforming Europe in the coming quarter remains.
The euro traded near the fourmonth low of 1.1809 touched earlier in the Asian session, while a gauge of the dollar against six major peers hovered just below a fourmonth high of 92.617 reached overnight.
The dollar gained 0.2 to 108.905 yen, another safehaven currency, as the pair continued to consolidate below 109.
At the same time, the dollars rally showed some signs of fatigue, as some of its bruised rivals recovered from lows amid…