“There’s been a clash and a friction between what the Fed is seeing and deciding to do, and what the White House and perhaps a lot of people in the equity market want the Fed to do,” said Juan Perez, director of trading of Monex USA in Washington. “If we had left the hawkish tone, the hawkish stance, and the hawkish press conference altogether, it makes sense to see the U.S. dollar rise – which it did. But today, because of the friction between the Fed and the White House, the dollar is once again hitting the brakes,” Perez added. Data showed that the number of Americans filing new applications for unemployment benefits increased just marginally last week, suggesting that the U.S. labor market remained stable.
The euro has been one of the biggest casualties of the dollar’s ascent this month, as investors have rushed to unwind bets laid on earlier this year on the premise that the European market may offer better opportunities.
The euro was last up 0.19 per cent at $1.1426, having hit a seven-week low on Wednesday. Still, it remained on track to lose nearly 3 per cent this month.
“I think there was too much optimism in the price of the euro. And I think that’s come back this week. There’s been a lot of commentary about how the EU conceded to the U.S. on this trade deal and that’s been a dose of reality for the Europeans,” Rabobank strategist Jane Foley said. The dollar weakened 0.31 per cent against the Swiss franc to 0.812 franc but it is on track to gain 2.36 per cent for the month. The European Union’s agreement on Sunday to 15 per cent tariffs on U.S. exports has cleared up a lot of uncertainty.
BOJ Governor Kazuo Ueda also said the U.S.-Japan trade deal reduced uncertainty on the outlook and heightened the likelihood of Japan durably hitting the BOJ’s 2 per cent inflation target – a prerequisite for further rate hikes.New U.S. trade deals included one with South Korea, which Trump said on Wednesday would pay a 15 per cent tariff on U.S. imports. That was lower than a threatened 25 per cent and the Korean won strengthened on the news and last stood at 1,395.21 per dollar. Trump on Wednesday also slapped a 50 per cent tariff on most Brazilian goods and said the United States is still negotiating with India. But he gave Mexico a 90-day reprieve ahead of his Friday deal deadline.”We do however continue to expect that the tariff rates now being announced and codified will ultimately prove to be more dollar negative, even if some of the bilateral announcements (particularly on the EU) likely catalysed the striking dollar rebound so far this week,” Goldman Sachs analysts led by Stuart Jenkins wrote in an investor note.
FAQs
Q1. What is symbol of US Dollar?
A1. The symbol of the US Dollar is $.
Q2. How was Euro performing?
A2. The euro was last up 0.19 per cent at $1.1426, having hit a seven-week low on Wednesday. Still, it remained on track to lose nearly 3 per cent this month.
