🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Forex - Dollar Extends Losses on Potential Pause in Rate Hikes

Published 11/19/2018, 11:20 AM
© Reuters.
GBP/USD
-
USD/JPY
-
DX
-

Investing.com - The dollar continued lower on Monday, adding to last Friday’s losses but hovering about the dollar index's 96 psychological handle, as investors reevaluated the future pace of interest rate hikes.

At 11:18 AM ET (16:18 GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dropped 0.29% to 96.05, after falling 0.48% on Friday.

The dollar’s decline at the end of last week came as Federal Reserve Vice Chairman Richard Clarida indicated there was evidence of a global slowdown and said interest rates were nearing the objective of a neutral rate that neither boosts nor hinders the economy.

Separately, Dallas Fed chief Robert Kaplan said that there is a growth slowdown in Europe and China.

Although a rate hike is expected at the end of the year meeting, the remarks were taken to suggest that the Fed may pause its tightening sooner than expected.

In currency pairs, cable moved higher after last week’s selloff over Brexit turmoil. According to the latest reports, British Prime Minister Theresa May’s opponents are six votes shy of the threshold needed to invoke a no confidence vote. Although the lack of support may lower the uncertainty over May’s place at the helm, doubt remains that she will be able to pass the Brexit deal through British parliament.

GBP/USD was last up 0.18% at 1.2857.

The euro benefitted from dollar weakness, changing hands at 1.1451, its highest level since Nov. 7.

Meanwhile, concerns over the ongoing trade dispute between the U.S. and China sparked demand for the safe haven yen.

U.S. President Donald Trump told reporters on Friday that his administration may not impose tariffs on more Chinese goods after China sent a list of measures that it would be prepared to take in order to help resolve a trade dispute between the two nations.

However, hopes that Trump’s remarks might signal a change in the direction of negotiations were dashed by U.S. Vice President Mike Pence on Saturday. Pence insisted that the U.S. will not back down from its trade dispute with China, and might even double its tariffs, unless Beijing bows to U.S. demands.

Pence’s comments dashed hopes of meaningful progress between Trump and Chinese President Xi Jinping on the sidelines of the G20 meeting to be held at the end of the month.

U.S. tariffs on $200 billion worth of Chinese goods are set to increase to 25% from 10% on Jan. 1.

USD/JPY was last off 0.26% at 112.52.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.