Dollar steady; Aussie, kiwi lower on profit taking

The dollar rose against most of its peers on Monday, although heightened investor expectations that the Federal Reserve will not raise rates this year are most likely to cap the greenback’s gains.

The Australian dollarAnd New Zealand dollar edged lower versus the dollar in early Asian trade, falling 0.2 percent and 0.1 percent, respectively.

Both currencies had gained around 1.5 percent versus the dollar last week as risk sentiment improved on hopes for both a U.S.-Sino trade deal and more aggressive stimulus from Chinese policymakers to support its ailing economy.

“Given the support we had seen in commodity currencies, it is reasonable to see profit booking. I expect the uptrend to resume soon,” said Michael McCarthy, chief markets strategist at CMC Markets.

The dollar fell 1.5 percent versus the offshore yuan last week, its steepest weekly decline since January 2017 as investors’ fears of a sharp slowdown in the world’s second largest economy somewhat abated.

The dollar index (DXY) was at 95.68, marginally higher in early Asian trade.

The euro EUR= fell around 0.1 percent to $1.1460. The single currency lost 0.3 percent on Friday after data showed that Italy, the euro zone’s third-largest economy, was at risk of recession.

The yen was at 108.40, marginally stronger versus the greenback.

The British pound gained 0.15 percent to $1.2861 at the start of what is expected to be a highly volatile week. Prime Minister Theresa May must win a vote in parliament on Tuesday to get her Brexit deal approved or risk a chaotic exit for Britain from the European Union.

 

Source: Investing.com

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