Tagged: dollar gains
12/01/2016 at 4:34 pm #3836
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Dollar backs away from 9-month high vs yen
* OPEC-driven surge in oil prices lifted U.S. yields and dollar
* Euro capped by concerns over Italy’s referendum
* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh (Updates prices, adds quotes)
By Patrick Graham
LONDON, Dec 1 The dollar traded just off a 9-1/2-month high against the yen on Thursday, steadying after a jump along with U.S. bond yields on the details of a deal to cut OPEC oil output.
The majority of banks remain focused on the prospect of more gains for the U.S. currency, anticipating that president-elect Donald Trump’s mix of tax cuts, spending and trade shifts will raise growth and price pressures in the United States.
But the dollar’s failure to push on strongly against the euro – again back above $1.06 in early European trade – hints there may be some fatigue in a rally that dates back two months and has deepened since Trump’s victory on Nov. 8.
“You see some brokers on the street with forecasts of parity or below parity (to the euro). For us it is unlikely we will get much more strength,” said Constantin Bolz, director for currency strategy with the chief investment office of UBS in Zurich.
“The Fed is likely to hike interest rates next month and the market has fully priced that in, along with roughly two rate hikes next year. Now are we really likely to get three or four?”
The dollar’s index against a basket of six major currencies last stood at 101.42, having risen as high as 101.83 and off 13-1/2-year peak of 102.05 set last week.
It retreated to 114.17, down a quarter of a percent on the day from a peak of 114.83 yen hit in Asian time, its strongest level since mid-February.
Steven Mnuchin, President-elect Donald Trump’s pick to lead the U.S. Treasury, gave no hint of any unease over the strong dollar in his first remarks since being named for the job, giving traders fresh impetus to buy the U.S. currency.
Oil prices jumped around 9 percent on Wednesday as OPEC members agreed to cut production for the first time since 2008 and the dominant reaction was through U.S. Treasury yields, which peaked just below new highs of 2.40 percent.
Higher Treasury yields in turn have been at the heart of the dollar’s gains.12/26/2016 at 4:03 pm #4099
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