Left Menu
Development News Edition

Dollar rally over basket of six major currencies driven by economic data

Devdiscourse News Desk | Updated: 17-05-2019 10:35 IST | Created: 17-05-2019 09:43 IST
Dollar rally over basket of six major currencies driven by economic data
Salvini's challenge to EU fiscal rules has been a key source of the worry for the euro, which has fallen 0.5% this week. The safe-haven yen also stood to benefit from the woes in Europe and elsewhere. Image Credit: Pixabay

The dollar held near a two-week high against its peers on Friday, supported by strong U.S. economic data and a bounce in Treasury yields. The dollar index versus a basket of six major currencies stood little changed at 97.802 after reaching 97.882 on Thursday, its highest since May 3.

The greenback reached the two-week peak on robust U.S. housing data and a weekly jobless claims report which pointed to sustained labour market strength in the world's biggest economy. The U.S. currency also drew strength as its counterparts such as the euro and pound were dogged by bearish factors.

"The euro is weighed down as the (euro) zone is saddled with weak economic fundamentals and Italian political concerns, while it's all about Brexit for the pound," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo. Italy's right-wing League party will "tear apart" European Union rules which are "strangling" the country if it scores well in a May 23-26 European parliamentary election, Italian Deputy Prime Minister Matteo Salvini said on Thursday.

Salvini's challenge to EU fiscal rules has been a key source of the worry for the euro, which has fallen 0.5% this week. The safe-haven yen also stood to benefit from the woes in Europe and elsewhere.

"Fiscal risks related to Italy is a theme sure to captivate speculative market players. Any resulting 'risk off' could benefit the yen not only against the euro but against the dollar as well," said Yukio Ishizuki, senior currency strategist at Daiwa Securities. The euro was steady at $1.1178 after falling to $1.1166 overnight, its lowest since May 6.

The common currency was a touch lower at 122.67 yen. It has retreated 0.5% against the yen this week, during which it slid to 122.06, the lowest since early January. Britain faces a potentially disorderly exit from the European Union as Prime Minister Theresa May has struggled to keep her Brexit deal and her premiership.

The possibility of a chaotic departure from the EU pushed the pound to a three-month trough of $1.2783 on Friday. Sterling last traded at $1.2787, having slumped 1.6% this week. The dollar initially extended overnight gains and popped above 110.00 yen. But it lost some traction, the last trading at 109.735 yen, weighed down as U.S.-China trade concerns continued to bubble in the background.

China may have no interest in continuing trade negotiations with the United States now, Bloomberg reported on Friday, quoting state media outlets. Against the safe-haven yen, the greenback fell to a 3-1/2-month low of 109.020 at the start of the week when a trade war between the United States and China intensified.

China's yuan retreated to 6.9099 per dollar in onshore trade, its weakest since late December. The Australian dollar stretched overnight losses and fell to a new 4-1/2-month trough of $0.6883. The Aussie suffered big losses the previous day after soft domestic employment data heightened expectations for an interest rate cut by the Reserve Bank of Australia.

Elsewhere, the Turkish lira slipped 0.37% to 6.0700 per dollar after the United States on Thursday terminated Turkey's preferential trade treatment that allowed some exports to enter the country duty-free. Softening the blow slightly, Washington halved its tariffs on Turkish steel imports to 25% from 50%. The 10-year U.S. Treasury note yielded 2.387%, having pulled back from a near two-month low of 2.354% brushed the previous day.


TRENDING

OPINION / BLOG / INTERVIEW

Rethinking Rural Livelihoods in the Times of COVID-19

The reverse migration caused by COVID 19 pandemic has put an additional burden of about one crore people on Indian villages particularly in the states of Uttar Pradesh, Bihar, Bengal and Odisha. Besides increasing the risk of spreading the ...

‘Discounted Deaths’ and COVID 19: Anthropology of Death and Emotions

Death is a social event rather than the mere cessation of biological functions. As seen by anthropologists, death is not just physical but intensely social, cultural, and political....

Indigenous knowledge of communities a must for maximizing impact of community work

Generally, it has been observed that the majority of the academicians in higher education institutions neglect the wisdom of community people and throw their weight around thinking that they know everything and the community knows nothing. ...

In rebuking FBR, Pakistan’s courts take a stand for public health

The system, if implemented effectively, will allow Pakistans revenue service to combat the illicit trade in tobacco products and potentially add hundreds of millions of dollars to the states budget each year. ...

Videos

Latest News

American Airlines soars 41% as plan to add July flights sparks relief rally

American Airlines Group Inc shares jumped more than 40 on Thursday after announcing a big boost to U.S. flights next month following dramatic cuts caused by the coronavirus pandemic, as well as some leadership changes to cut costs. American...

WRAPUP 7-'He touched so many hearts.' George Floyd remembered at memorial service

Hundreds of mourners in Minneapolis on Thursday remembered George Floyd, the black man whose death in police custody set off a wave of nationwide protests that reached the doors of the White House and ignited a debate about race and justice...

Soccer-Real and Atletico join forces to aid city's most vulnerable

Real Madrid and Atletico Madrid have joined forces to launch a fundraiser to help the most vulnerable families in the Spanish capital hit by the COVID-19 pandemic. Madrid has once again led the way in unity, sacrifice, and resolve. We are f...

Swiss say ready to help U.S., Iran with more releases

Switzerland confirmed its role on Thursday in the humanitarian gesture that led to the release of two detainees, American Michael White and Iranian Majid Taheri, saying it stood ready for further facilitation as a neutral intermediary.White...

Give Feedback