US Dollar Weakens, Stock Market Suddenly Vibrant
A gauge of the dollar erased a haven-driven gain as US stock futures turned positive and oil pared an intraday advance.
Bloomberg Dollar Spot Index held steady even as hostilities between Israel and Iran showed no signs of abating. Risk currencies Aussie and kiwi climbed on short-covering, according to an Asia-based FX trader
The US’s position as the world’s largest oil producer is likely helping to buoy the greenback, which advanced against most Group-of-10 peers in early Asia Monday
“ The escalation of the conflict between Israel and Iran could lead market participants to anticipate a weaker global economy, thereby supporting the USD,” Samara Hammoud of Commonwealth Bank of Australia wrote in a note
Additionally, higher oil prices boost the USD because the US is a net energy exporter
Nevertheless, internal shocks, such as erratic US policymaking, will continue to be a headwind for the USD: Hammoud
USD/JPY steady at 144.05 ahead of Tuesday’s BOJ decision, where policymakers are expected to keep interest rates on hold, with more focus on its future bond buying plans
AUD/USD rises 0.2% to 0.6500; NZD/USD adds 0.3% TO 0.6031
Yield on 10-year Treasuries gains 4bps to 4.44%
USD/CHF consolidated at 0.8112
EUR/USD steadied at 1.1547 after advancing 1.3% last week.(ayu)
Source: Bloomberg
