English>

MarketNews

Dollar climbs from four-week low as U.S. stocks decline - REUTERS

JULY 09, 2020

BY  Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - The dollar rallied from a four-week low on Thursday, as weaker U.S. stocks enhanced the currency’s safe-haven appeal for investors following a surge in new coronavirus cases and a U.S. Supreme Court ruling on President Donald Trump’s financial records.

FILE PHOTO: A U.S. Dollar banknote is seen in this illustration taken May 26, 2020. REUTERS/Dado Ruvic/Illustration

The euro fell from a one-month high versus the dollar, while commodity currencies, which tend to rise when risk appetite increases, also slid against the greenback.

The dollar rally coincided with the Supreme Court ruling on Thursday that a New York prosecutor can obtain Trump’s financial records. But it did prevent, at least for now, the Democratic-led House of Representatives from obtaining the same records.

“The dollar over the last few weeks has been trading on risk-taking levels and taken on its role as a safe haven,” said Ronald Simpson, managing director, global currency analysis at Action Economics in Florida.

“The Supreme Court ruling had a big impact on everything: the dollar rose, (Treasury) yields fell, and stocks got slammed. It puts some risk on Trump right now that something bad may come out,” he added.

Earlier in the global session, the dollar struggled, with the Chinese yuan climbing to a four-month peak, as investors increased positions in Chinese stocks on growing signs of a recovery in the world’s second-largest economy.

Market sentiment turned, however, during the U.S. session. Another contributing factor, apart from the Supreme Court decision, was the renewed surge in COVID cases.

More than 60,000 new COVID-19 infections were reported on Wednesday and U.S. deaths rose by more than 900 for the second straight day, the most since early June.

U.S. stocks fell on Thursday, a day after hitting a record closing high. The dollar continues to move in opposition to stocks and risk appetite.

Analysts believed though that despite losses, stocks should remain well-supported on dips.

“The risk backdrop should remain more or less positive for the foreseeable future, given the global fiscal and monetary policy setting,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

In early afternoon trading, the dollar index rose 0.3% to 96.741 =USD, after falling to a four-week low of 96.233.

The euro dropped 0.3% to $1.1291, not that far from a one-month high around $1.1371 hit earlier in the day EUR=EBS even after German export data failed to meet analysts' expectations.

The Chinese yuan soared to a four-month high of 6.9808 in the offshore market and was last little changed against the dollar at 6.9950 CNH=EBS.

The dollar was flat against the yen at 107.25 yen JPY=EBS and was up 0.3% versus the Swiss franc at 0.9402 franc CHF=EBS.

Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrea Ricci and Richard Chang

SEE HOW MUCH YOU GET IF YOU SELL

NGN
This website uses cookies We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you've provided to them or that they've collected from your use of their services
Real Time Analytics