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Dollar wallows near one-month low as strong euro, stock rally weigh -Breaking


© Reuters. FILEPHOTO: This illustration shows an American dollar banknote taken on May 26, 2020. REUTERS/Dado Ruvic/Illustration

Kevin Buckland

TOKYO (Reuters – The dollar sank to its lowest point in a month on Friday against key peers. It was hurt by a stronger euro, as traders bet that earlier European interest rate increases would happen and an increase in stock market volatility.

The New Zealand dollar fell amid falling consumer confidence. However, cryptocurrency ether rose to an all-time high.

The was, which compares the currency to six main competitors, including the Euro, was barely changed at 93.354. That’s close to Thursday’s low of 93.277 on Thursday – an unprecedented level since Sept. 27.

After rising to $1.1692 overnight, the euro was mostly flat at $1.16855.

Contrary to the yen (another traditional safe haven), the dollar was mostly stable at 113.50. It continued to fall gradually after the nearly three-year high reached last week at 114.695.

A global share index rose to the edge of a record height this week thanks to an earnings-driven rally that reached consecutive record highs on Wall Street including overnight.

After comments made by Christine Lagarde, President of European Central Bank, that were not enough to affirm the central bank’s dovish position in some quarters, the euro surged on Thursday

The central bank activities have made foreign-exchange markets volatile. After the Bank of Canada’s hawkish comments Wednesday, big movements were made by the Reserve Bank of Australia. The Reserve Bank of Australia followed suit on Thursday with a move and remarks from the ECB – ahead of next week’s meetings of the U.S. Federal Reserve.

Widely expected, the Fed will start to reduce stimulus starting next month. Interest rate rises are likely to follow next year.

Lagarde’s “pushback wasn’t forceful enough”, opening the door for the euro, TD Securities strategists said in a note.

But, they stated that it was difficult to extrapolate (euro strength) above this week’s Fed meeting in which taper is expected.

Later in the day traders will be able to see economic indicators from both countries. Europe gets a preliminary reading on the consumer price index while the U.S. receives personal income and spending data.

Sterling was close to flat at $.1.37925, as the currency fluctuated near its one-month peak last week.

Recent speculation about whether or not the Bank of England will raise interest rates at next week’s meeting has caused the pound to be affected.

The Australian dollar was stable at $0.75425, despite reaching $0.75555 at the beginning of July.

The RBA decided not to purchase a bond from the government as part of its stimulus program. This led to speculation that the central bank would allow rates to rise sooner than anticipated. On Friday, the central bank resisted purchasing the crucial bond.

After a sharp drop in consumer confidence, the New Zealand dollar dropped 0.3% to $0.717955.

In cryptocurrency, ether rose at a record $4,000. Its bigger counterpart bitcoin gained $62,000 to trade. But, it is still down on the record of $67016.50 last week.