Dollar Steadies on Month-End Flows as Yen Lags
The dollar steadied Monday with support from month-end flows. The yen has resumed its slide, and was the worst performer among peers in the Group of 10 against the greenback, as investors contend with the risk of currency intervention amid Japan-China political tensions and Tokyo’s large stimulus plan.
The Bloomberg Dollar Spot Index rose by less than 0.1%, boosting November gains to 0.5% so far
“November was defined by renewed macro uncertainty and a sharp reassessment of risk appetite,” wrote Barclays’ Sheryl Dong and Erick Martinez
The first monthly slump in US stocks since April, along with a broader reduction in risk appetite, means that global fund managers will have to buy dollars into the end of the month as they rebalance portfolios, they wrote
Fed Governor Christopher Waller said he’s advocating an interest-rate cut in December, though the central bank can probably take more of a meeting-by-meeting approach starting in January once it receives a flood of economic data
He said that job growth concentration in two sectors is not a good sign.
USD/JPY climbed 0.3% to 156.80, extending last week’s 1.2% advance. Japan’s defense minister, visiting a military base close to Taiwan, said plans to deploy missiles to the post would move forward as tensions smolder between Tokyo and Beijing
Investors are watching for potential official intervention to bolster the yen after Japan’s finance minister mentioned such a move as an option to stem the currency’s losses last week.
EUR/USD advanced 0.1% to 1.1524 after falling 0.9% last week; German business confidence unexpectedly dipped in November.
The European Union said no deal was expected Monday to lower tariffs on steel and other products during talks with senior US trade officials.
GBP/USD climbed 0.1% to 1.3111; the UK will cut energy bills by 25% for more than 7,000 manufacturers beginning in 2027 as the government attempts to charm businesses ahead of a tax-raising budget this week.
Source : Bloomberg.com
