Tue, Jan 03, 2017 - Page 12 News List

US dollar recovers from two-week low amid thin trade

Reuters, LONDON

The US dollar yesterday recovered from a two-week low against a basket of six major currencies, although trade was thin due to many markets being closed for the New Year holiday.

The greenback last month soared to 14-year highs, boosted by market expectations that the US Federal Reserve is to hike rates as many as three times this year, and that US president-elect Donald Trump will stoke growth and inflation with a program of fiscal expansion.

The US dollar finished the year with an about 4 percent annual rise, the fourth consecutive year of gains.

However, the index that measures the currency against six major rivals lost more than 1 percent during the last three days of last week, its weakness exacerbated on Friday during a flash surge for the euro in low volumes of trading in Asia.

The euro on Friday jumped US$0.02 to as high as US$1.07, before quickly retreating, prompting analysts to draw parallels with a “flash crash” in October last year that briefly knocked almost 10 percent off the value of Britain’s pound.

The euro yesterday edged down to US$1.0513, while the US dollar index climbed quarter of a percent to 102.43, close to the 14-year peak of 103.65 it touched on Friday.

Data released on Friday showed speculators once again taking a bullish stance on the US dollar, increasing their bets in the week up to Tuesday last week after cutting their long positions for the first time since October last year in the previous week.

A gun attack in Istanbul that killed 39 people was seen having little impact on the currency market, with the Japanese yen — traditionally used as a safe haven — falling against the US dollar and the Turkish lira slipping only 0.3 percent.

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