He global dollar rose this Thursday from a two-week low against its main peers in operations with little movement due to the holidays, while the euro fell as they curbed bets on further interest rate cuts by the European Central Bank,
He yen fell to 151.58 per dollar, but with its 2.1% advance this week the currency has recovered losses suffered since the US elections and was on track for its best weekly performance in three months. Markets see a 53% chance that the Bank of Japan raise rates next month.
He dollar index rose to 106.21 after falling as low as 105.85 in the previous session, a two-week low, on a day where trading was generally light as US stock and bond markets were closed for the holiday of Thanksgiving.
“It’s probably going to be a quiet couple of days to close out the week, but I hope the dollar to recover as December progresses,” said Michael Brown, senior research strategist at Pepperstone, adding that Wednesday’s move that put the dollar back below 106 seemed a little “off from fundamentals.”
“We continue to talk about American exceptionalism, an incredibly long list of problems in the euro zone and now we have concerns about the French budget this morning,” he added.
For its part, the euro fell 0.2% to $1.054625 after its sharp rise on Wednesday following aggressive comments from Isabel Schnabel, a member of the board of directors of the European Central Bankwho told Bloomberg that rate cuts should be gradual and move toward neutral, not accommodative, territory, prompting investors to retract expectations of more aggressive rate cuts and buy the common currency.
“Not only has the downward momentum faded, but upward momentum is also starting to build,” said Quek Ser Leang, a strategist at UOB in Singapore. “We view the current price action as part of a rally that could potentially reach $1.0650,” he added.
The figures of inflation which will be announced later in the session in Germany will offer the next test, as the common currency heads for its worst monthly performance in two and a half years. Eyes are also on France’s fragile coalition government, which is struggling to pass a budget.
Source: Ambito
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