05:44
MarocTique
The dollar was poised for a weekly drop against 11 of its 16 major peers as traders weighed whether slowing global growth will curb momentum in the U.S. economy.
The greenback stemmed this week’s losses before data forecast to show an increase in housing starts and building permits in the world’s largest economy. Traders have pushed back expectations on when the Federal Reserve will increase interest rates, driving Treasury yields lower. New Zealand’s dollar fell as much as 1 percent before paring losses after its central bank erroneously republished September comments saying the currency’s level was unjustified and unsustainable.
“The market’s bullish U.S. dollar view has capitulated slightly,” said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd. in Auckland. “Currency markets are pricing in a little bit more in terms of economic growth, whereas the rates markets are pricing a cautious FOMC,” he said referring to the Federal Open Market Committee.
The dollar traded at 106.34 yen at 9:19 a.m. in Tokyo from 106.33 yesterday, poised for a 1.2 percent weekly drop. It was unchanged today at $1.2809 per euro, down 1.4 percent since Oct. 10. New Zealand’s currency was little changed at 79.52 U.S. cents, set for a 1.7 percent gain on the week, the most since the period ended June 13.
JPMorgan Chase & Co.’s Global FX Volatility Index rose to as much as 8.56 percent this week, the most since Feb. 6. It has climbed from 5.28 percent in July, the lowest on record.
Speculation the U.S. central bank will raise rates next year had led to a record rally in the U.S. currency. The advance started to reverse last week after minutes of the Sept. 16-17 FOMC meeting showed participants said expansion “might be slower than they expected if foreign economic growth came in weaker than anticipated.”
Source: Bloomberg
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