Dollar Up as Stocks Slump; Loonie Falls Into Budget
A Bloomberg gauge of the dollar rose to its highest level since May, supported by risk-off trading and a slump in the pound following remarks from the UK’s Chancellor of the Exchequer. Canada’s loonie fell to its weakest mark since April ahead of the government budget announcement.
The Bloomberg Dollar Spot Index rises as much as 0.3%, up for a fifth day and strongest since May 29.
“The breadth of the FX selloff vs the dollar is more widespread than I would have expected,” said Alvaro Vivanco, head of strategy at TJM FX. “It doesn’t seem necessarily driven by positioning”.
US stocks fell at the cash open; 10-year yield slips about 2bp to 4.09%
Fed’s Michelle Bowman will speak on supervision and monetary policy Tuesday.
US government shutdown now tied for longest in history as many voters head to polls in off-year elections, including for NYC mayor and New Jersey and Virginia governors.
Cable down 0.8% to GBP/USD 1.3034 low, weakest since April, following Chancellor Rachel Reeves speech on fiscal outlook.
The 30-year yield hit its lowest level since April before paring the move as a lack of specific policy details in Reeves’s speech disappointed investors.
USD/CAD rallies 0.3% to 1.4096 high, the strongest since April, ahead of Canadian budget announcement in Parliament later Tuesday
Prime Minister Mark Carney to meet with finance minister ahead of budget tabling at 4:00 p.m. in Ottawa.
USD/JPY drops 0.5% to 153.41 as haven yen outperforms all G-10 peers on day.
Japanese Finance Minister Satsuki Katayama says there’s no change in the government stance of monitoring currency movements with a high sense of urgency.
Hedge funds seen closing longs following Katayama’s comments and place dip-fading orders closer to 152.00-50, Europe-based traders say
EUR/USD falls 0.3% to 1.1482; AUD/USD falls 0.7% to 0.6492, lowest since Oct. 23.
Australia’s central bank held its key interest rate steady in a widely anticipated decision, while Governor Michele Bullock signaled a combination of lingering inflation pressures and a steady job market raised the bar to further easing.
Source : Bloomberg.com
