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

FOREX-Dollar slips after Trump fires FBI director

Published 10/05/2017, 10:36 am
Updated 10/05/2017, 10:40 am
© Reuters.  FOREX-Dollar slips after Trump fires FBI director
EUR/USD
-
USD/JPY
-
DX
-
US10YT=X
-
DXY
-

* Concerns about possible North Korean test also underpin yen

* Euro edges back toward 6-month highs touched after Macron's win

TOKYO, May 10 (Reuters) - The dollar slid on Wednesday and the perceived safe-haven yen gained after U.S. President Donald Trump abruptly fired FBI Director James Comey in a move that shocked Washington.

Comey had been leading his agency's investigation into alleged Russian meddling in the 2016 U.S. presidential campaign and possible collusion with Trump's campaign. Democrats immediately accused Trump of acting out of political motives. U.S. political turmoil tends to weigh on the dollar, as a divided Congress could derail Trump's promised tax reform and stimulus steps.

The dollar index, which tracks the greenback against a basket of six major currencies, slipped 0.2 percent to 99.437 .DXY , moving away from a three-week high of 99.688.

The dollar dipped 0.2 percent against its Japanese counterpart to 113.77 yen JPY= , below its overnight high of 114.325, which was its highest since March 15.

Rekindled fears that North Korea could be gearing up for another weapons test also underpinned the yen.

"In the early morning hours of Asian trade, the yen started to strengthen, and it could have been the reaction of overseas markets to a North Korean diplomat's comments," said Mitsuo Imaizumi, Tokyo-based chief foreign-exchange strategist for Daiwa Securities.

In an interview with Sky News on Tuesday, Pyongyang's ambassador to the UK, Choe Il, said North Korea is ready to conduct a sixth nuclear test. Observers of that country have said such a test was likely, but his comments reminded markets that tensions could escalate on the recently calm Korean peninsula.

South Korea's newly elected liberal leader Moon Jae-in, who will be sworn in on Wednesday, is expected to try to engage Pyongyang with dialogue and aid, breaking from his predecessor's hardline policies. this in the background, as well as the present uncertainty in the U.S., the dollar will trade heavily today below the 114-yen level," Imaizumi said.

Lower U.S. yields also pressured the dollar. The benchmark 10-year U.S. Treasury yield US10YT=RR slipped to 2.397 percent in early Asian trade, down from Tuesday's U.S. close of 2.407 percent.

It scaled five-week peaks overnight, as interest rate futures priced in close to a 90 percent chance that the U.S. Federal Reserve will raise interest rates again at its next meeting in June. US/

The euro added 0.1 percent to $1.0885 EUR= , edging back toward six-month highs hit after centrist Emmanuel Macron's victory in the French presidential election on Sunday.

European Central Bank chief Mario Draghi is scheduled to speak at the Dutch House of Representatives later on Wednesday. Investors will be waiting to see if he alters his dovish tone in light of recent strength in the euro zone economy.

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.