💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

FOREX-Dollar at 3-wk highs on Fed official comment; Syria, N.Korea in focus

Published 10/04/2017, 10:55 am
Updated 10/04/2017, 11:00 am
© Reuters.  FOREX-Dollar at 3-wk highs on Fed official comment; Syria, N.Korea in focus
EUR/USD
-
USD/JPY
-
DX
-
US10YT=X
-
DXY
-

* U.S. jobs growth falls short but trend seen intact

* Euro pressured by French election uncertainty

* U.S. dollar net long positions at 5-week low-IMM data

TOKYO, April 10 (Reuters) - The dollar started the week at three-week highs against a currency basket on Monday, after a key U.S. Federal Reserve official reinforced the central bank's commitment to interest rate hikes.

The dollar index, which tracks the greenback against six major rival currencies, added 0.1 percent to 101.260 .DXY , reaching out to its highest levels since March 15.

New York Fed President William Dudley said the Fed might avoid raising interest rates at the same time that it begins shrinking its $4.5 trillion bond portfolio, prompting only a "little pause" in the central bank's rate hike plans. comments bolstered U.S. Treasury yields and burnished the dollar's yield allure. The benchmark 10-year yield, which wallowed at its lowest levels since November on Friday, last stood at 2.384 percent US10YT=RR in Asian trading, up from its U.S. close of 2.373 percent.

"Rising interest rates in the U.S. are supporting the dollar, I think," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

Financial markets were also watching out for developments in the Syrian civil war following last week's U.S. missile strikes on an airbase in Syria, which had given the perceived safe-haven Japanese currency a boost.

The U.S. attacks were in retaliation for what it said was a chemical weapons attack on civilians by President Bashar al-Assad's forces. The strikes drew sharp criticism from Russia, and questions from U.S. allies about future policy.

"Geopolitical risk can be a potentially positive factor for the yen, with risk aversion and flight to safety," Yamamoto added. "As for the euro, markets are pricing in uncertainty around the French presidential election."

The dollar tacked on 0.3 percent to 111.43 yen JPY= .

Geopolitical tensions in Asia were also in focus, after the U.S. decision to move a Navy strike group toward the Korean peninsula following provocative behaviour from North Korea. White House national security adviser H.R. McMaster said on Sunday that the move was a "prudent" step. jobs data on Friday missed forecasts but still suggested that overall labour market strength remained intact. Job growth slowed sharply in March amid inclement weather, and as layoffs continued in the retail sector, but the unemployment rate dropped to a nearly 10-year low of 4.5 percent. expectations for more Fed interest rate hikes, speculators further trimmed their bullish bets on the U.S. dollar in the week ended April 4, pushing net longs to their lowest level since late February, according to Commodity Futures Trading Commission data released on Friday and calculations by Reuters. IMM/FX

The euro edged down 0.1 percent to $1.0580 EUR= after earlier touching $1.0570, its lowest level since March 9.

For weeks, polls have shown centrist Emmanuel Macron and far-right leader Marine Le Pen on track to top the first round of voting on April 23 and go through to a May 7 runoff. But recent polls have shown the race tightening.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.