Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Gains From Tech Stocks Turmoil; Sterling Weakens

ForexSep 09, 2020 02:58AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Peter Nurse

Investing.com - The dollar gained in early European trade Wednesday, with the sharp selloff in U.S. equity markets prompting traders to ditch riskier currencies in favor of the world's reserve currency. 

At 3 AM ET (0700 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.1% at 93.562. The index has risen just short of 1% over the last week, climbing from the more than two-year lows it touched earlier in the month.

"The tech selloff has caught the market by surprise and it is a bit jittery as to whether there are broader implications," said Bank of Singapore currency analyst Moh Siong Sim, in a Reuters report.

"It might force some position unwinding in other parts of the market, and that's probably what we're seeing right now," he said.

EUR/USD slipped 0.1% to 1.1768, continuing to retreat from the 1.20 level it briefly touched last week before European Central Bank chief economist Philip Lane’s comments that the exchange rate mattered to monetary policy.

With this in mind, Thursday’s ECB meeting looms large, with investors looking to closely monitor any comments on the euro given it has still risen 10% since coronavirus lockdowns started in March, even with the recent retreat.

“We think it is too early for the ECB to forcefully talk down the euro this week,” analysts at ING said, in a research note. “We don’t look for Trichet-like comments on a ‘brutal’ EUR appreciation. Rather, President Christine Lagarde may highlight that the central bank monitors the euro closely while reiterating that the exchange rate isn't seen as a target.”

Elsewhere, worries about Brexit trade negotiations have pushed the pound down to levels last seen at the end of July. GBP/USD dipped 0.4% to $1.2939, while EUR/GBP rose 0.3% to 0.9093.

Britain will set out its blueprint for life outside the European Union later Wednesday, publishing legislation a government minister acknowledged would break international law in a "specific and limited way".

This is unlikely to be received favorably in European circles, increasing the likelihood of a messy end to the post-Brexit transition period at the end of the year.

“While we still see an above 50% probability of a deal, the lack of risk premia priced in suggests further downside to the currency in coming weeks, particularly if little progress is made ahead of the 15 October deadline,” said ING, in a research note.

 

Dollar Gains From Tech Stocks Turmoil; Sterling Weakens
 

Related Articles

Dollar steadies as traders reassess rate hike bets
Dollar steadies as traders reassess rate hike bets By Reuters - Jan 17, 2022

By Joice Alves LONDON (Reuters) - The dollar edged lower on Monday as traders took the view that Federal Reserve tightening moves were largely priced in, while the euro eased from...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Smarteck Production
Smarteck Production Sep 09, 2020 3:35AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
nice
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email