Dollar advances on taper talk ahead of critical retail sales, Coinbase, vaccines eyed

The dollar is edging higher after Fed officials began talking about tapering bond-buys. All eyes are on US retail sales for March, which are forecast to surge. Cryptocurrencies are off their fresh highs and Coinbase closed its debut day lower. Concerns about vaccines persist.

Taper talk: Jerome Powell, Chair of the Federal Reserve, said that the bank would first taper down its bond-buying scheme before raising interest rates, but stressed the economy still needs to make significant progress.

Vice-Chair Richard Clarida hinted that meetings including new Fed forecasts, such as the upcoming one in June, would offer opportunities to assess if enough progress has been made to reassess purchases.

Dollar bounce: The mere talk about tapering supported the dollar, pushing EUR/USD away from form 1.20 and GBP/USD down from 1.38. Gold is holding up around $1,740 and USD/JPY is hovering around 109.

Shopping spree: The focus shifts to Thursday’s release of US retail sales figures for March. The economic calendar is pointing to an increase of over 5% after a slide in February and as Americans received new stimulus checks. Uncertainty is high with some experts seeing a double-digit leap in expenditure.

The US also releases weekly jobless claims, which are set to slide to around 700,000 and other figures such as industrial output.

Vaccines: The US Center for Disease Control and Prevention (CDC) has delayed its decision about the safety of Johnson & Johnson’s COVID-19 jabs and the EU is set to provide its verdict next week. In the meantime, Brussels announced the bloc’s 27 countries is set to receive another 50 million doses of the Pfizer/BioNTech inoculations in the second quarter. The old continent continues lagging behind other developed economies.

Coinbase, one of the largest cryptocurrency exchanges, directly listed in New York and experienced substantial volatility. The firm surpassed the $100 billion valuation only to close 14% below its opening price.

Bitcoin is changing hands around $63,000, below the peak near $65,000 recorded on Wednesday but above the previous tops. Ethereum, XRP, and other digital assets remain well bid.

AUD/USD is trading around 0.77, marginally lower despite another blockbuster job report in Australia – 70,700 positions were gained in March and the unemployment rate fell to 5.6%. China releases first-quarter growth figures overnight, with estimates standing at roughly 18% expansion in comparison to the first three months of 2020.

USD/CAD is changing hands at around 1.25, with the Canadian dollar benefiting from an increase in oil prices. US crude inventories dropped more than expected.

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