FOREX-Dollar nears 2-week lows as investors await Fed minutes

By Saqib Iqbal Ahmed and Elizabeth Howcroft

NEW YORK, Apr 7 (Reuters) – The dollar hovered near a two-week lows against a basket of leading currencies on Wednesday, as profit-taking and weak US Treasury yields put pressure on.

* Market players were hesitant to place large directional bets before the Federal Reserve minutes were released later in the day, and the dollar was little changed against most of its major rivals.

* The dollar index, which compares the greenback with a basket of six outstanding currencies, yielded 0.101%, to 92,213 units.

* The greenback has appreciated this year along with bond yields, as investors are betting that the United States will recover more quickly from the COVID-19 pandemic than other developed nations.

* However, the 2.5% gain in the dollar index in March, the largest monthly increase since late 2016, led to some traders taking profits, analysts said. The weakness in the return of debt after its accelerated advance this year also added pressure on the dollar.

* All of this left investors wondering if the dollar’s weakness, which sent the currency to a nearly three-year low earlier in the year, could be about to resume.

* “I don’t think it’s necessarily the time to say that the dollar index is in a downtrend, but rather that some of the support that it has been getting was reduced to some degree,” said Stuart Cole of Equiti Capital in London.

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Exchange rates in the world

GRAPHIC: The Calm Before the Storm

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(Additional reporting by Ritvik Carvalho and Joice Alves; edited in Spanish by Carlos Serrano)