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Forex - Dollar Slips Lower as Stocks Steady after Selloff

ForexFeb 12, 2018 08:29
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© Reuters. Dollar slips lower as stocks steady after selloff

Investing.com - The dollar slipped lower against a currency basket on Monday as Asian stock markets steadied after last week’s selloff, dampening safe haven demand for the greenback.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, dipped 0.11% to 90.13 by 03:23 AM ET (08:23 AM GMT). The index rose 1.45% last week.

Shares in Hong Kong and China rose on Monday and U.S. futures extended gains, adding to a late bounce on Friday. Japan’s Nikkei was closed for a holiday.

U.S. stocks ended higher on Friday but still posted their worst week in two years as fears of faster inflation and thus more aggressive interest rate increases triggered a global stock market rout.

Investors were looking ahead to U.S. inflation data due on Wednesday. A stronger than expected reading could spook markets again.

The dollar was lower against the traditional safe haven yen, with USD/JPY down 0.24% to 108.53, but was still holding above Friday’s four month trough of 108.03. The dollar fell almost 1.3% against the yen last week.

Investors tend to seek out the yen in times of market turbulence as the currency is backed by Japan's current account surplus, which offers it more resilience than currencies of deficit-running countries.

In Japan, reports on Monday indicated that Haruhiko Kuroda would be re-appointed as head of the Bank of Japan and likely continue the country's ultra-loose monetary policy.

The euro edged higher, with EUR/USD up 0.14% to 1.2267. The single currency ended last week down 1.82%, the largest weekly percentage decline since November 2016.

Sterling was little changed against the dollar and the euro, with GBP/USD at 1.3833 and EUR/GBP trading at 0.8863.

The pound had weakened against the dollar and the euro on Friday after Michel Barnier, the European Union’s Brexit negotiator warned Britain that a post-Brexit transition deal was “not a given”.

Forex - Dollar Slips Lower as Stocks Steady after Selloff
 

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