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Dollar operates at monthly lows, consolidates "mean reversion" markets

Por Saikat Chatterjee

LONDON, April 14 (Reuters) – The dollar was trading near its lowest level in a month on Wednesday, as strong demand at an auction of US bonds accentuated the decline in debt yields, reducing the interest rate advantage that has the greenback on other currencies.

* While spreads between 10-year US bond yields and German bunds have narrowed slightly to 193 basis points from 200 points at the beginning of the month, they remain much higher than the 150 points seen at the beginning of the month. anus.

* April has been a month characterized by “mean reversion” prices between the main currencies, which has led the yen and the euro to recover a good part of the drastic losses in March. Even the currencies of commodity-exporting countries have rebounded.

* In a factor that exacerbates the decline in the dollar, inflationary pressures in the United States showed a general increase after data that showed that consumer prices rose 2.6% in March, their fastest pace in eight and a half years.

* However, this increase does not translate into expectations of an anticipated tightening of monetary policy from the Federal Reserve, and instead fueled the demand for more US debt, as investors believe that inflationary pressures are transitory.

* In London trading, the dollar was down 0.1% against a basket of rival currencies at 91.75, its lowest level since March 19. After hitting a four-and-a-half-month high of 93.43 at the end of last month, the greenback has declined 2%, in line with the drop in bond yields.

* The dollar was particularly vulnerable to the yen and the euro, as the European currency was poised to break the psychological threshold of $ 1.20 for the first time since the beginning of March.

* Among cryptocurrencies, bitcoin hit an all-time high of $ 64,895 before the trading debut of digital currency operator Coinbase on Wednesday morning.

(Edited in Spanish by Marion Giraldo)

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