Forex Today: Dollar’s momentum could suffer from stimulus news

What you need to know on Monday, March 1:

The greenback appreciated sharply at the end of the week, finishing it with gains against all of its major rivals. Global indexes closed with sharp losses, except for the Nasdaq that managed to post an intraday advance.

US Treasury yields continued to retreat ahead of the weekly close, but that didn’t prevent the dollar from appreciating. The yield on the benchmark 10-year Treasury note settled at 1.40% after peaking at a one-year high of 1.61% mid-week.

The EUR/USD pair settled just above the 1.2060 support, while GBP/USD ended at 1.3930. Commodity-linked currencies were the most hit by the greenback’s strength, and are at risk of extending their slumps.

Gold plunged to a fresh 2021 low of $1,717.14 a troy ounce, while oil prices also retreated, although WTI settled at $61.50 a barrel.

On Saturday, the US House of Representatives passed President Joe Biden’s $1.9 trillion coronavirus relief package by 219-212 votes. Republican support was missing, but the bill moved to the Senate, where is expected to pass before March 14, when the previous round of stimulus expires. Also on Saturday, President Biden called on the Senate to pass the stimulus bill.

Over the weekend, news pointed out that UK finance minister Rishi Sunak would announce this week 5 billion pounds of additional grants to help businesses hit by the pandemic, in his budget statement next Wednesday.

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