Sun, Apr 16, 2017 - Page 14 News List

US dollar rises as market ‘oversold’ on Trump remarks

Reuters, NEW YORK

The US dollar on Thursday rose, rebounding from a slide investors considered overdone following remarks by US President Donald Trump that the currency was getting too strong and he would prefer the US Federal Reserve to keep interest rates low.

The greenback and US Treasury yields took a heavy hit after Trump’s comments to the Wall Street Journal, in which he said the strength of the US dollar would hurt the US economy.

The US dollar on Thursday rose 0.45 percent against a basket of major currencies, posting its largest one-day gain in two weeks.

It fell 0.6 percent on Wednesday, the biggest one-day fall in more than three weeks.

“Clearly, I think it was oversold yesterday,” said Peter Ng, senior currency trader at Silicon Valley Bank in Santa Clara, California. “The market was very sensitive to headlines given how nervous it has become due to geopolitical risk.”

Trading was also thinner than usual because of the Passover and Good Friday holidays in the US and Europe this week, Ng said.

Having hit a five-month low of ¥108.73 in early Asian trading, the US dollar steadied at ¥109.10.

“Yes, it was negative what [Trump] said ... but it’s not a big surprise — it wasn’t a U-turn in his rhetoric on the exchange rate so far,” said Commerzbank currency strategist Thu Lan Nguyen in Frankfurt. “The question is, is he able to influence monetary policy in order to get a weaker [US] dollar? That is still an open question.”

Trump’s remarks went against a long-standing practice of both US Democratic and Republican administrations refraining from commenting on policy set by the independent Fed.

It was also unusual for a US president to talk about the value of the US dollar, a subject usually left to the US Secretary of the Treasury.

The US dollar this week shed 1.75 percent against the yen, its fourth week lower in five, as a rise in tensions in Asia and Europe prompted buying of the safe-haven Japanese currency.

Investors are concerned about the upcoming French presidential election as well as possible US military action against Syria and North Korea, and an escalation of tensions with Russia.

The euro fell 0.5 percent to US$1.0619 after touching a one-week high in overnight trading. It gained 0.23 percent against the US dollar for the week.

The US dollar was little changed against China’s offshore yuan, after falling to a six-day low on Wednesday. It had risen to a one-month high at the start of the week.

TAIPEI

In Taipei, the New Taiwan dollar on Friday fell NT$0.075 against the greenback to close at NT$30.400, as traders there rushed to move their funds into US-dollar denominated assets for hedging against rising geopolitical tensions, dealers said.

For the week, the NT dollar was up 0.7 percent against the US dollar from last week’s NT$30.601.

Additional reporting by CNA

This story has been viewed 3339 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top