- Nineteen prisoners use cutlery to break out of cells at Winchester prison
- France wants progress in Ukraine before Russia returns to G7
- Italy president begins talks to seek way out of government crisis
- Italian PM expected to resign as political chaos deepens
- Russia says US cruise missile test ‘regrettable’
- Kremlin - No date set for Normandy talks on Ukraine despite Macron meeting
- Egypt court hands out 6 death sentences on terror charges
- Putin says Russian nuclear explosion poses no threat
- Russian panel eyes alleged foreign interference in protests
- Gran Canaria wildfire triggers evacuation of thousands of people
- PM Johnson calls on Germany and France to compromise on Brexit
- Sudan's ex-president Bashir arrives at corruption trial
TEHRAN, August 27 -The dollar steadied on Monday as risk sentiment improved following reassuring Federal Reserve comments and signs U.S. and Mexican negotiators were homing in on a common position on the North American Free Trade Agreement (NAFTA).
TEHRAN, Young Journalists Club (YJC) -The dollar steadied on Monday as risk sentiment improved following reassuring Federal Reserve comments and signs U.S. and Mexican negotiators were homing in on a common position on the North American Free Trade Agreement (NAFTA).
At a symposium at Jackson Hole, Wyoming, Fed chair Jerome Powell on Friday emphasized the central bank’s push to raise interest rates despite President Donald Trump’s criticism of higher borrowing costs.
The Treasury yield curve reached its flattest level since 2007 - a factor seen as reducing support for the dollar - in the wake of Powell’s speech.
His comments did little to change market expectations for rate hikes in September and December and disappointed some dollar bulls hoping for a more hawkish message.
“Some in the market were wrongfooted because they thought the Fed might shift toward an auto-pilot mode (approach to rate hikes) as it did in 2004. Obviously, Powell prefers a gradual approach,” said Ulrich Leuchtmann, head of FX and emerging market research at Commerzbank AG in Frankfurt.
“The return of risk appetite is negative for the dollar and its safe-haven appeal.”
The dollar index against a basket of six major currencies .DXY was broadly flat at 95.254 at 1100 GMT, after slipping more than 0.5 percent in the previous session.
Adding to the risk-on mood, U.S. and Mexican trade negotiators appeared close to reaching a common position on NAFTA, with Mexico’s economy minister saying on Sunday that talks had “continued to make progress”.
“There is growing optimism that a US/Mexican agreement can be reached ...which in turn would allow Canada to re-join talks and progress to be made overall,” said Kit Juckes, foreign exchange strategist at Societe Generale.
“We’re never more than a tweet away from disaster on trade negotiations but for now, there’s optimism.”
The Mexican peso MXN=D4 was up 0.7 percent at 18.81 per dollar. Talks are scheduled to resume on Monday.
A prospective U.S. deal with Mexico “takes a little bit of global trade war risk off the table”, said Robert Carnell, chief economist and head of research, Asia-Pacific at ING.
The euro was little changed at $1.1607 EUR=EBS after going as high as $1.1654, its strongest since Aug. 2. The single currency advanced more than 0.7 percent on Friday.
The Chinese yuan extended its rally in the onshore market to as high as 6.8061 per dollar CNY=CFXS, its strongest since Aug. 8.
The yuan had surged about 0.8 percent in onshore trade on Friday after the People’s Bank of China said it was adjusting its methodology for fixing the yuan’s daily midpoint, amid broad dollar strength and ongoing trade tensions between Washington and Beijing.
In emerging markets, the Turkish lira weakened 3 percent against the dollar on Monday after a week-long holiday, hit by persisting concern about a diplomatic rift with Washington over a detained U.S. pastor.
The slide as local trading resumed left the lira down around 38 percent this year.
A broad retreat in emerging market currencies earlier this month had been a key source of strength for the greenback.
Source: Reuters
Your Comment