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Forex - Dollar Hits 9-Week Highs as Euro, Sterling Slump

Published 10/24/2018, 08:40 AM
Updated 10/24/2018, 08:40 AM
© Reuters.  The dollar hit a 9-week high. - The dollar rose to nine-week highs against a currency basket on Wednesday as the euro slumped on disappointing euro zone data while the pound was pressured lower amid persistent investor anxiety over Brexit.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.5% to 96.19 by 08:30 AM ET (12:30 GMT).

The euro extended early losses, with EUR/USD down 0.69% to 1.1392, the lowest level since August 17.

The single currency weakened after data showing that euro zone private sector activity grew at the slowest pace in more than two years in October, as an export-led slowdown widened out to the service sector.

The data highlighted concerns over the economic impact of tariffs and trade wars.

The row over Italy’s budget also remained in focus a day after the European Union took the unprecedented step of rejecting Rome’s 2019 draft budget, amid concerns over the impact of increased spending on already high national debt levels.

Italy’s government now has three weeks to resubmit a revised spending plan to Brussels.

The euro was also weaker against the yen, with EUR/JPY down 0.51% to 128.33.

The pound hit one-and-a-half month lows, with GBP/USD falling to 1.2889, before pulling back to 1.2920.

Sterling remained under pressure as Brexit talks remained stalled with just over five months until Britain is scheduled to leave the EU and British Prime Minister Theresa May facing intense political criticism over her Brexit strategy.

The Canadian dollar was holding steady against its U.S. counterpart, with USD/CAD changing hands at 1.3090 ahead of a widely-expected rate hike by the Bank of Canada later in the day.

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