AceTraderFx Jun 27: Dollar gains broadly on renewed risk appetite
Market Review - 26/06/2018 15:47GMT
The greenback snapped its recent losing streak and staged a rebound against majority of its peers on Tuesday as risk sentiment returns and investors booked profits from dollar's recent decline, which was triggered by trade tensions. Dollar also gained on expectation that Federal Reserve will continue to raise interest rates this year.
Versus the Japanese yen, although dollar initially dropped to an intra-day low at 109.37 in Asian morning, price erased intra-day losses and gained to 109.80 in European morning. Despite a brief retreat to 109.55 at New York open, the greenback rose to session highs at 110.20 in New York morning on easing risk aversion before stabilising.
Although the single currency extended its recent rise and hit a fresh 10-day high at 1.1720 in Asian morning, price erased intra-day gains and tumbled in tandem with sterling to 1.1652 in Europe, then ratcheted lower to a session lows at 1.1635 in New York morning on rising Italy bond yields as well as dollar's broad-based strength before recovering to 1.1653 in New York afternoon.
The British pound also edged up in tandem with euro to session highs at 1.3292 in Asian morning before tumbling to an intra-day low at 1.3207 in European morning on dovish comments from incoming Bank of England rate-setter Haskel before rebounding to 1.3255 at New York open. However, cable met renewed selling there and fell to session lows at 1.3192. Price last traded at 1.3238 near the close.
BoE's Haskel said 'BoE has scope to cut rates slightly lower in case of economic downturn, cud do more QE if financial mkts dislocated; many influential economists argue that underemployment responsible for weak wage growth; there may be much more slack in UK economy than we think; more slack in economy wud weaken case for interest rate rise.'
In other news, ECB's De Guindos said 'the fundamentals remain in place for continued solid n broad-based economic growth; benign mkt reaction following the announcement of our decision supports the appropriateness of our current assessment; confident that the sustained convergence of inflation twds our inflation aim will continue in the period ahead.'
On the data front, the Conference Board's index of consumer confidence decreased to 126.4 this month, compared to a reading of 127.6 forecast by economists. May's reading was revised up to 128.8 from the initial 128.0.