Dollar Rally Enters 6th Day, Helped by Aussie, Euro Weakness By


© Reuters. – The dollar was holding close to two-week highs against the euro in early trading in Europe Friday after a report downplaying the chances of the U.S. and China ending their trade war.
At 03:15 AM ET (0815 GMT), the , which tracks the greenback against a basket of other major currencies, was at 96.38, closing in on a new high for 2019. It’s now risen for the last six days, the longest continuous rally since October. Against the , it was at $1.1336.
The latest leg up came after a Wall Street Journal report saying it was ‘highly unlikely’ that Presidents Donald Trump and Xi Jinping would meet to resolve their trade differences before new U.S. tariffs come into force on March 1. Such bearish comments tend to support the dollar, whose safe haven function comes to the fore when trade tensions rise.
But the dollar’s strength is also a function of other currencies’ weakness right now, especially since the Federal Reserve has effectively put further interest rate increases on hold.
“We would be well served and the country would be well served if we paused and were patient for some number of months and sort of get out of the way,” Dallas Fed Chairman Robert Kaplan – one of the Fed’s more hawkish members – Thursday. He noted that the stimulus from the 2017 tax cut is waning, while last year’s interest rate hikes are still to have their effect on the economy at large.
Earlier Friday, figures from Germany were in line with the weak pattern of recent data, showing exports at their lowest level in two years in December. The data hint at a growing impact from Brexit on Europe’s largest economy: the sharpest drop in both exports and imports was with non-euro-zone members of the EU, of which the U.K. is by far the largest.
The has been range-bound since the Bank of England’s press conference Thursday, where Governor repeated that the next interest rate move could be up or down, depending how Brexit plays out.
“The Monetary Policy Committee are wage hawks and would be in hiking mode if not for Brexit,” said Nordea Markets analyst Jan van Gerich in a research note.
Elsewhere, the dollar fell sharply after the Reserve Bank of Australia cut its growth forecasts. It’s lost nearly 2.5% this week as the RBA has dropped its tightening bias under the influence of the Chinese economic slowdown.
The dollar was largely flat against the at 109.77.
Chinese markets remained closed for the Lunar New Year holiday.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link


Please enter your comment!
Please enter your name here