Thursday, 29 June 2017

Home » Business » Finance » Dollar loses 14-year peak

Dollar loses 14-year peak

January 6, 2017 10:32 am

The dollar stepped further away from a 14-year peak against a basket of currencies on Thursday, as investors locked in gains from its two-month-old rally after Donald Trump won the US presidential election.

The dollar had soared on Trump’s plans to cut taxes, boost fiscal spending and protectionist trade rhetoric, all seen as inflationary and lifting US bond yields.

But uncertainty on exactly what his presidency will bring is prompting some players to close their bets on the dollar ahead of Trump’s planned news conference on January 11. He will be inaugurated on January 20.

“Some people say the ‘Trump rally’ has come to an end already. Others say the real rally will begin after he will take office,” said Kyosuke Suzuki, director of forex at Societe Generale.

“It’s not clear what the market’s next theme will be.”

The dollar’s index against a basket of six major currencies slipped to 102.23 after having hit a 14-year high of 103.82 on Tuesday, when a strong reading from a U.S. manufacturing survey boosted the currency.

The dollar’s initial support lies at 101.91, its Dec. 30 low, though a breach of that level would take it to three-week lows and could send a bearish signal in the near term. The euro rose 0.3 percent in Asia to $1.0524, having recovered from a 14-year low of $1.0340 touched on Tuesday.

The common currency was helped at the margin by data showing euro zone prices rose faster than expected in December and surveys suggesting business growth reached its highest in more than five years.

The dollar slipped 0.5 percent to 116.62 yen after having peaked at 118.605 on Tuesday, just shy of its 10-1/2-month high of 118.66 touched on December 15.

Some traders noted that there may have been dollar selling by Japanese exporters after their New Year holidays. The Australian dollar hit a two-week high of $0.7303.

U.S. bond yields edged down on Wednesday, with the 30-year yield hitting a four-week low, even as the minutes from the Federal Reserve’s December policy meeting showed almost all policymakers thought the economy could grow more quickly because of fiscal stimulus under the Trump administration.

Author: Gesture Chidhanguro

Dollar loses 14-year peak Reviewed by on . The dollar stepped further away from a 14-year peak against a basket of currencies on Thursday, as investors locked in gains from its two-month-old rally after The dollar stepped further away from a 14-year peak against a basket of currencies on Thursday, as investors locked in gains from its two-month-old rally after Rating: 0
scroll to top