Dollar Weakens Amid Low Volume, Trade Uncertainty
The dollar weakened against all Group of 10 currencies amid uncertainty about U.S. trade policy. Spot volumes were soft as Tokyo and London were closed for holidays.
Option volumes were at 50% of the recent average, according to DTCC data. President Donald Trump indicated the U.S. may sign trade deals with several countries this week but said he had no plans to talk to his Chinese counterpart. The Bloomberg Dollar Spot Index fell as much as 0.4% while options traders added bearish options exposure across the curve
Volatility trades better bid on the front-end with near-term focus on central bank interest rate meetings in the U.S. and U.K.
USD/CHF halved a 0.6% decline to trade at 0.8244, while USD/JPY fell 0.7% to 143.96
EUR/CHF was little changed at 0.9342; Swiss inflation slows to weakest in more than four years as strong franc weighs on cost of imported goods
EUR/USD up 0.4% to 1.1338; one-week risk reversals rise to 95bps, calls over puts; ECB Governing Council member Fabio Panetta says new wave of protectionism could hurt economies around the world
AUD/USD hits highest since Dec. 3, rallying 0.9% to 0.6489; NZD/USD up 0.6% to 0.5981
READ: Dollar's Decline Sparks Dislocation Across Asian Currencies
GBP/USD +0.2% to 1.3302
Source: Bloomberg
