Breaking News
0

Forex - Dollar Rally Enters 6th Day, Helped by Aussie, Euro Weakness

ForexFeb 08, 2019 08:34
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

Investing.com – The dollar was holding close to two-week highs against the euro in early trading in Europe Friday after a report downplaying the chances of the U.S. and China ending their trade war.

At 03:15 AM ET (0815 GMT), the US Dollar Index, which tracks the greenback against a basket of other major currencies, was at 96.38, closing in on a new high for 2019. It’s now risen for the last six days, the longest continuous rally since October. Against the euro, it was at $1.1336.

The latest leg up came after a Wall Street Journal report said it was "highly unlikely" that Presidents Donald Trump and Xi Jinping would meet to resolve their trade differences before new U.S. tariffs come into force on March 1. Such bearish comments tend to support the dollar, whose safe haven function comes to the fore when trade tensions rise.

But the dollar’s strength is also a function of other currencies’ weakness right now, especially since the Federal Reserve has effectively put further interest rate increases on hold.

“We would be well served and the country would be well served if we paused and were patient for some number of months and sort of get out of the way,” Dallas Fed Chairman Robert Kaplan – one of the Fed’s more hawkish members - said in a speech Thursday. He noted that the stimulus from the 2017 tax cut is waning, while last year’s interest rate hikes are still to have their effect on the economy at large.

Earlier Friday, trade figures from Germany were in line with the weak pattern of recent data, showing exports at their lowest level in two years in December. The data hint at a growing impact from Brexit on Europe’s largest economy: the sharpest drop in both exports and imports was with non-euro-zone members of the EU, of which the U.K. is by far the largest.

The British pound has been range-bound since the Bank of England’s press conference Thursday, where Governor Mark Carney repeated that the next interest rate move could be up or down, depending how Brexit plays out.

“The Monetary Policy Committee are wage hawks and would be in hiking mode if not for Brexit,” said Nordea Markets analyst Jan van Gerich in a research note.

Elsewhere, the Aussie dollar fell sharply after the Reserve Bank of Australia cut its growth forecasts. It’s lost nearly 2.5% this week as the RBA has dropped its tightening bias under the influence of the Chinese economic slowdown.

The dollar was largely flat against the yen at 109.77.

Chinese markets remained closed for the Lunar New Year holiday.

Forex - Dollar Rally Enters 6th Day, Helped by Aussie, Euro Weakness
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email