Dollar Weakens Amid U.S. Shutdown Worries, Rate-hike Pause Hopes
January 14 2019 - 2:54AM
RTTF2
The U.S. dollar was lower against its most major counterparts in
the European session on Monday, as U.S. government shutdown entered
its fourth week, while mounting hopes that the Fed will pause its
tightening cycle also weighed.
The US government shutdown has become the longest in history, as
Trump and the Democrats remained at loggerheads over the
President's demand for $5.7 billion to build a wall along the
U.S.-Mexico border.
Over the weekend, Trump warned of a much longer impasse and
blamed the democrats for the shutdown.
U.S. treasury yields fell, with the benchmark yield on 10-year
note falling 2.67 percent, while that of the 2-year equivalent was
down by 2.52 percent. Yields move inversely to bond prices.
China's exports and imports fell unexpectedly in December,
raising fresh concerns about global growth.
China's exports unexpectedly fell 4.4 percent from a year
earlier in the month — the biggest monthly drop in two years, while
imports also fell 7.6 percent, marking the biggest decline since
July 2016.
The currency traded mixed against its major counterparts in the
Asian session. While it fell against the yen and the euro, it held
steady against the franc and the pound.
The greenback depreciated to a 4-day low of 107.99 against the
yen, from a high of 108.55 hit at 5:00 pm ET. If the greenback
falls further, 106.00 is possibly seen as its next support
level.
Having climbed to 0.9845 against the franc at 2:15 am ET, the
greenback changed its course and slipped to a 4-day low of 0.9813.
The greenback is seen finding support around the 0.97 region.
The greenback slid to 1.2880 against the pound, its biggest
decline since November 23, 2018. The next possible support for the
greenback is seen around the 1.30 level.
On the flip side, the greenback held steady against the euro,
after touching a peak of 1.1451 at 5:00 am ET, which was its
strongest since January 9. The pair finished last week's deals at
1.1468.
Data from the Eurostat showed that Eurozone's industrial
production decreased at a faster-than-expected pace in
November.
Industrial production decreased a seasonally adjusted 1.7
percent from October, when it edged up 0.1 percent, revised from
0.2 percent. Economists had expected a 1.5 percent slump.
The greenback appreciated to a 4-day high of 0.7176 against the
aussie and 6-day high of 1.3298 against the loonie and held steady
thereafter. The greenback finished Friday's trading at 0.7214
against the aussie and 1.3264 against the loonie.
The greenback that closed Friday's deals at 0.6832 against the
kiwi advanced to 0.6797 and held steady thereafter.
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