Dollar Drops Amid Low Volumes and Trade Uncertainty
The dollar dropped versus all Group-of-10 currencies except the loonie amid uncertainty about US trade policy. Spot volumes were muted as Tokyo and London were closed for a holiday.
The Bloomberg Dollar Spot Index dropped 0.3% while options traders added to bearish options exposure across the curve.
Options volumes ran at 50% of recent averages, according to DTCC data.
President Donald Trump indicated the US may ink trade deals with some countries as soon as this week, but said he had no plans to talk to his Chinese counterpart.
EUR/USD rose 0.3% to 1.1329; one-week risk reversals rose to 104bps, calls over puts.
ECB Governing Council member Fabio Panetta said a new wave of protectionism could damage economies around the world.
USD/CHF fell 0.5% to 0.8227, while USD/JPY dropped 0.8% to 143.78.
Swiss inflation slowed to the weakest in more than four years as the strong franc drives down the costs of imported goods.
AUD/USD rose 0.7% to 0.6477, hitting its highest since Dec. 4; NZD/USD gained 0.5% to 0.5978.
GBP/USD rose 0.2% to 1.3304.
USD/CAD traded little changed at 1.3813.
Source: Bloomberg
