Dollar buoyed by US-UK trade deal
The U.S. dollar gained against the safe-haven yen and Swiss franc on Thursday with market nerves calmed by news of a trade deal between the United States and Britain, while sterling reversed gains made after an interest rate cut from the Bank of England.
U.S. President Donald Trump announced a "breakthrough" trade agreement with Britain via an Oval Office press conference on Thursday, although he said some of the details "are being written up."
The deal could serve as a template for other countries looking to sign trade agreements with the U.S., said Steve Englander, head of global G10 FX Research at Standard Chartered in New York.
"Getting a deal that looks like it's going to work is going to be risk positive. I think the market will look at what's disclosed and ask how much of this will be applicable to other countries or if it's going to be the template for other deals," Englander said.
Trump said he expects substantive negotiations between the United States and China when Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer meet China's economic tsar, He Lifeng, in Switzerland on Saturday.
The dollar rose against the yen following Trump's announcement and was last up 0.98% at 145.185 yen. Against the Swiss franc, it was 0.48% stronger at 0.8275 franc.
The BoE's Monetary Policy Committee voted 5-4 to cut rates by a quarter point, in line with expectations. But there was an unexpected divergence among voting members: two, Swati Dhingra and Alan Taylor, voted for a bigger half-point cut while Chief Economist Huw Pill and external member Catherine Mann wanted to hold interest rates.
The BoE's decision came a day after the U.S. Federal Reserve held interest rates but said the risks of higher inflation and unemployment had risen.
Sterling gave up earlier gains and was down 0.09% at $1.32775.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.41% to 100.31, on track for a second session of gains. The euro was down 0.33% at $1.1262.
The dollar also gained against both the Swedish and Norwegian currencies after Sweden's Riksbank and Norway's Norges Bank held rates, as expected. The Swedish crown was up 0.41% at 9.6984 per dollar, while the Norwegian crown was last at 10.3833 per dollar, up 0.43%.
In cryptocurrencies, bitcoin gained 4.69% to $101,312.68. Ethereum rose 14.47% to $2,058.62.
Source: Reuters
