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• The dollar is holding steady in a risk-averse environment, while the euro awaits a critical ECB decision

The dollar is holding steady in a risk-averse environment, while the euro awaits a critical ECB decision

On Thursday, the dollar was bolstered by cautious risk sentiment, which was fueled in part by concerns about the Delta variant, while the euro awaited the European Central Bank’s policy announcement later in the day.

The dollar index was at 92.712 on Wednesday, has increased for the third day in a row as U.S. stocks retreated from high valuations due to concerns about the strength of the economic recovery.

Risk sentiment improved slightly after powerful New York Fed Bank President John Williams warned late Wednesday that more progress in the labour market is needed before the Fed reduces its assistance.

His remarks, however, came as little surprise after the Fed effectively ruled out any likelihood of tapering this month following the release of disappointingly dismal U.S. payroll numbers on Friday. On the other side, the European Central Bank is poised to reduce stimulus on Thursday, taking a small step toward unravelling the emergency economic relief it provided during the pandemic.

On Wednesday, the Bank of Canada maintained its current quantitative easing programme while keeping its key interest rate at a record low of 0.25 per cent. Ahead of China’s inflation report later in the day, the Chinese yuan was trading at 6.457 per dollar.

Many emerging market currencies were also under pressure from a stronger dollar, with the Brazilian real and the Turkish lira among the worst impacted. Bitcoin, on the other hand, remained unstable after an 11% drop on Tuesday.

It now faces fresh obstacles after the US Securities and Exchange Commission (SEC) informed Coinbase (COIN.O) that if it goes forward with the introduction of its interest-bearing “Lend” programme for crypto assets, it will be sued. The coin was recently worth $46,650, while ether was at $3,480.