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TEHRAN, Jul 18 - The dollar slipped on Thursday as risk aversion in the broader markets pushed benchmark U.S. yields to a nine-day low.
TEHRAN, Young Journalists Club (YJC) -The dollar index versus a basket of six major currencies was down 0.2% at 97.081.
The index had climbed to a one-week peak of 97.444 the previous day on stronger-than-expected U.S. retail sales and a slump in sterling.
But it edged lower as safe-haven Treasury yields fell in the wake of weak U.S. housing market data and concerns about the prolonged U.S.-China trade dispute.
“The dollar basically handed back earlier gains as Treasury yields pulled back and on IMF comments, and came back to where it was a few days ago,” said Takuya Kanda, general manager at Gaitame.Com Research Institute.
Various economic data have given conflicting signs regarding the state of the U.S. economy, but that does not change the bigger picture of the dollar facing downward pressure due to an expected rate cut by the Federal Reserve later this month, Kanda said.
The International Monetary Fund (IMF) said on Wednesday the greenback was overvalued by 6% to 12%, based on near-term economic fundamentals.
The Fed is widely expected to lower interest rates by 25 basis points (bps) at its July 30-31 policy meeting, with some in the market wagering on a larger 50 bps cut.
Sterling was a shade higher at $1.2438. It had stumbled to $1.2382, its lowest since April 2017 on Wednesday amid growing risks of Britain leaving the European Union in a no-deal Brexit, before selling abated.
The euro added to modest overnight gains and edged up 0.1% to $1.1238. The single currency’s gains were limited as it was restrained by expectations of easing from the European Central Bank as early as next week.
The dollar was 0.2% lower at 107.730 yen, having gone as low as 107.640, its weakest level since July 3.
The Australian dollar advanced after data on Thursday showed the country’s jobless rate remained stable and underemployment decline in June, reducing the prospect of near-term easing by the Reserve Bank of Australia.
Source: upi
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