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Dollar Up as U.S. Tech Stocks See Second Selloff in Less Than a Week

Forex Sep 08, 2020 10:13PM ET
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© Reuters.

By Gina Lee

Investing.com – The dollar was up on Wednesday morning in Asia, clinging onto gains after U.S. markets saw a second rout in tech stocks in less than a week, giving the dollar a boost.

The U.S. Dollar Index, which tracks the greenback against a basket of other currencies inched up 0.07% to 93.502 by 10:01 PM ET (3:01AM GMT).

“U.S. equity futures will likely be a guide to currencies today. The more equity futures fall, the larger the strength in the dollar and the yen,” Commonwealth Bank of Australia’s head of international economics Joe Capurso told Reuters.

The dollar also saw gains against the euro in the wake of European Central Bank (ECB) chief economist Philip Lane’s comments during the previous week that the exchange rate mattered to monetary policy.

“Lane appears to have succeeded in drawing a line in the sand at $1.20 at least for the time being,” Rabobank senior FX strategist Jane Foley told Reuters.

“We see scope that euro/dollar could dip further towards the $1.17 level on a one-month view,” she added

Thursday’s ECB meeting could see even more gains for the greenback, with investors looking to closely monitor any comments on the euro.

The GBP/USD pair was down 0.23% to 1.2957 on the back of turbulent Brexit negotiations between the U.K. and the European Union.

Investors are waiting for the U.K.’s blueprint laying out the terms life post-Brexit, expected later in the day. But fears over an amicable divorce between the two have mounted as the blueprint involves publishing legislation that reportedly breaks international law “in a limited way”, potentially souring talks and increasing the likelihood of a no-deal Brexit.

The USD/JPY pair inched down 0.08% to 105.93.

The USD/CNY pair edged up 0.12% to 6.8520. Data released earlier in the day showed that the Consumer Price Index (CPI) and Producer Price Index for August rose 2.4% and fell 2% respectively year-on-year, with CPI rising 0.4% month-on-month. The readings all saw drops from the previous month, but hit forecast numbers prepared by Investing.com.

The AUD/USD pair inched up 0.06% at 0.7218 and the NZD/USD pair edged up 0.03% to 0.6620.

Dollar Up as U.S. Tech Stocks See Second Selloff in Less Than a Week
 

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