Investing.com – The u.s. dollar rebounded on Thursday, after a slump for nearly two weeks, after four consecutive days of losses, as a weaker pound has helped to support the recovery of the greenback against its major rivals.
At 10h48 ET (14: 48 GMT), the dollar index, which measures the greenback’s strength against a basket of six major currencies weighted by trade, has increased from 0.25% to 96,75. The index reached 96,35 points a day earlier, its lowest level since 4 march after the u.s. data on the prices for the production have confirmed the foot-dragging of the federal Reserve on interest rates in the face of inflationary pressures eased.
The weakness of sterling has contributed to the strength of the dollar, while the markets have made a break in the middle of the developments of the Brexit. The british parliament has rejected the possibility of leaving the european Union without an agreement, but a vote is expected later in the day.
Although the british parliament is generally called upon to approve a request for extension of the deadline of 29 march, it would still require the approval of the EU.
“Consequently, the appreciation of the pound sterling yesterday is still set on shaky foundations, and non-solid”, explain the analysts of DBS in a note.
The GBP / USD has lost 0.73% to 1,3238 to 10: 49a.m. (14: 49 GMT).
The euro has also lost its momentum after four days of gains against the greenback.
“For the future, the EUR / USD could resume the climb if the demand for the dollar remains moderate. However, it seems that at this stage, the pair is preparing for a bearish correction might take place before the end of the week, ” said the senior analyst of Capital Markets Helen Rush.
Rush has stated that a clean break above the technical resistance level of 1.1340 would be necessary to confirm a new rally.
– Reuters contributed to this report.