The dollar slips as the rally loses momentum

LONDON (Reuters) – The dollar fell from a five-month high on Tuesday, losing momentum after a broad rebound driven by rising US bond yields and easing easing of US trade tensions. . U.-China.

PHOTO OF THE FILE: The notes of the US dollar and the Japanese yen are shown in this illustration on June 2, 2017. REUTERS / Thomas White / Illustration / File Photo

The index of the dollar against a basket of six main currencies traded at 93,367. DXY, below a maximum of five months of 94,058 set on Monday.

The prospect of a resolution to trade tensions between the US and China on Monday boosted the dollar.

But a 10-year retreat in 10-year Treasury yields from last week's highs has encouraged traders to gain some gains in their bullish bets, said Gavin Friend, senior equity markets strategist. NAB in London.

"It's been a big jump for the dollar in general, so this seems like a bit of profit-taking," Friend said.

After a prolonged period of weakness, the dollar has gained 5.4 percent since mid-February, the biggest jump the currency has seen since 2015.

Investors who took big positions against the dollar anticipating that would fall in 2018 they rushed to relax and cover their positions, pushing the dollar even higher.

The view that many parts of the world economy were increasing together had given the dollar a smaller advantage over other currencies earlier this year.

Over the past month, however, the dollar has been bolstered by generally strong US economic data. UU They have supported the adjustment position of the monetary policy of the Federal Reserve this year.

The dollar has also been strengthened against the euro, which has been affected by concerns about political uncertainty in Italy.

The 5-star anti-establishment movement in Italy and the far-right League proposed on Monday Giuseppe Conte, a little known law professor, as prime minister to lead the coalition government of large expenditures.

The euro rose 0.3 percent to $ 1.1827 EUR = EBS, after having fallen to its lowest level since mid-November.

This week will bring a new test for certain bulls of the euro with the release of data "flash" PMI for May on Wednesday, and markets waiting to see if the slowdown of the first quarter in Europe extended to recent months .

"We continue to see PMI on Wednesday as a flash point for the euro and we see downside risks in manufacturing numbers," said Elsa Lignos, Global Head of FX Strategy at RBC.

Rabobank badysts said they had revised down their euro target against the dollar to 1.15.

"While the strength of the dollar is still a factor, the weakness of the euro is against a large part of the story," the bank said in a note to clients, "Rabobank badysts said in a note

Edition by Andrew Heavens


Source link