Pound Slips After Weaker Inflation Adds to Case for BOE Stimulus

© Reuters.  Pound Slips After Weaker Inflation Adds to Case for BOE Stimulus © Reuters. Pound Slips After Weaker Inflation Adds to Case for BOE Stimulus

(Bloomberg) — The slid and gilts rallied after inflation data backed up Bank of England policy maker Michael Saunders’ call for urgent stimulus to boost the U.K. economy.

Sterling fell against all its peers and government bond yields dropped to the lowest in more than a month as the data fueled bets that the central bank will lower interest rates this year. Money markets are now fully pricing in a full 25-basis-point rate cut for June, compared to November a day ago, and see a 62% chance of a move this month.

Saunders’ view on the need for more accommodative policy comes just days after BOE Governor Mark Carney said Britain’s economic growth had slowed below potential and that the Monetary Policy Committee had discussed the merits of near-term stimulus.

“There is more room for easing expectations to rise should incoming data disappoint and that could keep short-term sterling downside risks intact,” said Manuel Oliveri, a currency strategist at Credit Agricole (PA:) AG.

The pound fell 0.2% to $ 1.2998 by 9:40 a.m. in London, and also slipped 0.2% to 85.65 pence per . Benchmark 10-year yields extended their drop to seven basis points at 0.66%.

U.K. annual inflation came in at 1.3% for December, versus expectations for 1.5%, data showed. If the U.K. postponed easing policy this could spur risks “of a low inflation trap,” Saunders said earlier on Wednesday.

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Forex – Sterling Slips vs Dollar, Euro as Vlieghe Fuels Rate Hopes

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Investing.com — The dollar opened the week stronger against the and the Japanese , but weaker against the euro, with markets still unsettled by the weak labor market report on Friday.

The , which measures the greenback against a basket of currencies, was effectively unchanged at 3:10 AM ET (0810 GMT) at 97.130. However, that masked a 0.5% rise for the dollar against sterling, which continued to suffer from speculation on an interest rate cut from the Bank of England. The was up marginally at $ 1.1128.

Speeches by Governor Mark Carney and Monetary Policy Committee member Silvana Tenreyro last week had encouraged hopes of a cut. Over the weekend, another MPC member Gertjan Vlieghe, had signalled in an interview with the Financial Times that he would also back a rate cut barring “an imminent and significant improvement in the U.K. data.”

Vlieghe will get his chance to judge on that at 4:30 AM ET (0930 GMT) with the latest update on and its components, along with data for November. The National Institute of Economic and Social Research publishes its later at 9 AM ET (1400 GMT).

“Sterling seems to be caught between the bid from the under-weight asset managers and some speculators seeing the Brexit uncertainty lifted on the one hand, and the under-appreciated risks of a rate cut and a no-deal Brexit still on the other,” said Marc Chandler, managing partner of Bannockburn Global Forex. He sees a near-term range of $ 1.2900-$ 1.3200 for Cable.

The continued unrest in Iran over the weekend appears to have had little impact on broader sentiment, which is firmly in risk-on mode as the risk of war with the U.S. recedes and the signing of the preliminary trade agreement between China and the U.S. – scheduled for Wednesday – draws nearer.

The broke through 6.90 to the dollar for the first time in five months overnight, while the rose to a 20-month high. The dollar also continued to lose ground against other barometers of risk appetite such as the Indonesian and Turkish .

Analysts at Nordea pointed to the incongruity of sharply rising emerging market currencies, given the consistently weak numbers coming out of global purchasing manager indexes.

“Either EM FX and equities are too expensive or else the global manufacturing PMI is about to explode higher. It is do or die time,” analysts Andrea Steno Larsen and Martin Enlund said. “It’s very hard to find a trigger for a weakening market at present (outside of Iran maybe) but maybe that is a worrying sign in itself?”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – Yen Slips as Risk Appetite Bounces Back on Trump’s Remarks; U.S. Dollar Fl

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Investing.com – The Japanese yen slipped on Thursday in Asia as safe-haven demand faded after U.S. President Donald Trump signalled de-escalation in conflict with Iran.

The that tracks the greenback against a basket of other currencies last traded at 96.985 by 1:30 AM ET (05:30 GMT), down 0.01%.

Earlier this week, the Islamic Republic launched several rockets against U.S. airbases in Iraq in response to a U.S. airstrike that killed a top Iranian general last week.

In response to the attacks from Iran, Trump said the U.S. “will immediately impose additional punishing economic sanctions on the Iranian regime.” The sanctions would remain in force until Iran changes its behavior, he added.

The decision from the president to opt for sanctions rather than military response sent safe-haven assets down, while stocks and other risk assets recovered.

The pair was up 0.1% to 109.26.

The pair gained 0.2% to 1.3119. Prime Minister Boris Johnson told European Commission Chief Ursula von der Leyen that the U.K will not extend its transition out of the European Union beyond December 2020, raising fears that the U.K. could still exit the EU without a deal at the end of the year.

Leyen warned that “without an extension of the transition period beyond 2020,” an agreement on a new trade deal would be a risk.

Meanwhile, the pair and the pair both inched up 0.1%.

The pair dropped 0.3% to 6.9247. China’s National Bureau of Statistics reported that the country’s rose 4.5% last month from a year earlier. The median forecast was for a 4.7% increase.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Forex – U.S. Dollar Slips On Impeachment News; AUD Climbs on Jobs Data

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Investing.com – The U.S. dollar slipped on Thursday in Asia after U.S. House of Representatives voted to impeach Republican U.S. President Donald Trump for abuse of power and obstruction of Congress.

Trump is the third president to be impeached in U.S. history but is likely to survive a trial in the GOP-led Senate, which is expected to vote in January.

The U.S. dollar index slipped 0.1% to 96.925 by 11:30 PM ET (03:30 GMT).

On the data front, the National Association of Realtors will report on existing home sales for November tomorrow.

Sales of existing homes are expected to have dropped 0.2% last month to an annual rate of 5.44 million, according to forecasts compiled by Investing.com.

Initial jobless claims is also due. Economists are looking for a drop in claims for first-time unemployment benefits to 225,000.

Meanwhile, the Philadelphia Federal Reserve will release its manufacturing index for December on the same day. Economists expect the Philly Fed Index to come in at 8 for the month from 10.4 in November. The index tracks manufacturing in Pennsylvania, New Jersey and Delaware.

The USD/JPY pair gained 0.1% to 109.57 after the Bank of Japan kept its policy unchanged on Thursday morning. The central bank maintained its forward guidance, saying it expected rates to remain low or lower as long as there was a chance of losing price momentum. The decision was largely in line with expectation.

The Australian dollar climbed 0.3% against the U.S. dollar to reach 0.6875 after data showed the country’s unexpectedly in November declined. Employment jumped 39,900 last month, compared with economists’ estimates of a 15,000 gain, data from the Australian Bureau of Statistics showed Thursday.

The NZD/USD pair also gained 0.1% to 0.6591 after the country’s third quarter came in stronger than expected.

The GBP/USD pair recovered and inched up 0.1% to 1.3082 after falling this week amid renewed concern of a possible no-deal Brexit.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Pound stumbles on reported new Brexit deadline; Aussie dollar slips on RBA

By Hideyuki Sano

TOKYO (Reuters) – The British pound fell on Tuesday after reports UK Prime Minister Boris Johnson was seeking a hard line on Britain’s transition period after Brexit, while the dollar dropped on a downbeat tone from the nation’s central bank.

Sterling dropped as much as 0.7% to $ 1.3236 , as its Friday’s 1-1/2-year peak of $ 1.3516 looked increasingly like a near-term peak following the massive relief rally after last week’s UK election.

Johnson’s revised Withdrawal Agreement Bill would require the United Kingdom to have arrangements to leave the European Union be in place by Dec. 31 next year, UK broadcaster ITV (LON:) reported on Monday.

The move dashes hopes Johnson would take a flexible approach to the end-2020 deadline for a trade deal with the EU after Britain leaves the bloc, which now looks almost certain to happen on Jan. 31 following the landslide Conservative election win.

“Common sense suggests that crafting a trade deal would take at least more than a year, so markets had assumed that the transition period will be extended,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“It seems like the big majority Johnson won is enabling him to take a hard line approach, which the market doesn’t like so much… Considering the UK economy looks set to deteriorate as people and companies start to leave the country because of Brexit, sterling’s short-covering rally is over,” he added.

The pound last stood at $ 1.3286, down 0.3% from late U.S. levels.

The Australian dollar lost 0.2% to $ 0.6868 after the Reserve Bank of Australia opened the door to another cut in interest rates as early as February, should household incomes stay depressed or the labor market takes a turn for the worse.

Minutes of its December policy meeting out on Tuesday, showed the central bank’s board was concerned that wage growth was too weak to revive either inflation or consumption.

Other major currencies saw limited moves as investors sought more details on an interim trade deal the United States and China struck last week. The deal has broadly capped safe-haven currencies, such as the yen, and supported risk-sensitive currencies.

Against the yen, the dollar traded at 109.56 yen , up 0.05% from late U.S. levels, having gained 0.15% on Monday to edge near six-month high of 109.73 hit on Dec. 2.

The euro stood at $ 1.1147 (), maintaining its uptrend from its seven-week low of $ 1.1098 touched on Nov. 29.

The deal, announced on Friday after more than two-and-a-half years of volatile negotiations between Washington and Beijing, will reduce some U.S. tariffs on Chinese goods in exchange for increased Chinese purchases of some U.S. goods.

“There is some scepticism, but on the whole, the deal is likely to lift corporate sentiment. Even though we may not see lively market moves in coming couple of weeks due to holiday seasons, we are likely to see gradual rise in risk assets,” said Masaru Ishibashi, joint general manager of trading at Sumitomo Mitsui Bank.

“Some emerging market currencies are already starting to price that in,” he added.

The Mexican peso rose to a five-month high of 18.921 per dollar , also helped by a new trade deal with the United States and Canada signed last week to replace the 1994 North American Free Trade Agreement (NAFTA).

Economic data from the United States also underpinned the improved mood around the global economy.

Data out on Monday showed the U.S. economy remained robust, with U.S. homebuilder sentiment surging to its most optimistic reading in more than 20 years [USNAHB=ECI], way past market expectations for a flat reading.

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Dollar slips after Fed cuts but indicates a pause; BOJ decision eyed

By Tomo Uetake

TOKYO (Reuters) – The dollar dipped against a basket of major currencies on Thursday, reversing earlier gains, after the Federal Reserve cut interest rates for the third time this year but signaled its rate-cut cycle might be at a pause, as was broadly expected.

In lowering its policy rate by 25 basis points to a target range of between 1.50% and 1.75%, the U.S. central bank dropped a previous reference in its policy statement that it “will act as appropriate” to sustain the economic expansion – language that was considered a sign for future cuts.

Still, lack of an explicit signal from the Fed that it is done with easing for now was perceived to be less hawkish than expected, helping to drive the dollar down.

“The new, slightly shorter, statement tries to keep their options open and puts them back into a data-dependent mode, but circumstances could mean that they have less optionality than they think,” said Tim Foster, portfolio manager at Fidelity International in London.

The () rose to 98.00 as Fed Chairman Jerome Powell spoke about its decision, the highest since Oct. 17, before slipping. The index was last down 0.3% at 97.37, its lowest level in a week.

The euro last changed hands at $ 1.1167 (), while the greenback last traded at 108.66 yen .

The dollar also temporarily dipped on news that Chile has withdrawn as host of an APEC trade summit in November where the United States and China had been expected to take major steps toward ending a 15-month-old trade war.

Optimism that the U.S. and China will soon agree on a partial deal has boosted risk sentiment this week.

Sterling edged up after British Prime Minister Boris Johnson won parliamentary approval on Wednesday to hold a general election in December, though moves were limited as large currency options expiring this week curbed volatility.

The pound was trading at $ 1.2921, a shade higher on the day.

The Australian and New Zealand dollars firmed as investors scaled back wagers on local interest rate cuts after the Fed indicated it might be pausing in its easing campaign.

The reached a three-month top at $ 0.6918, having been as low as $ 0.6849 at one stage on Wednesday, and the dollar popped up to $ 0.6420, leaving behind Wednesday’s low of $ 0.6335.

Westpac economists changed their call on New Zealand interest rates, now expecting no cut at the Reserve Bank of New Zealand’s (RBNZ) policy meeting on Nov. 13. Investors have also been lengthening the odds on a move from the Reserve Bank of Australia (RBA) in the near term.

The Bank of Japan will likely hold off on expanding stimulus later in the day, as calm markets and easing U.S.-China trade tensions take the heat off the central bank from using its limited monetary arsenal to fight the risk of recession.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – Pound Slips as Johnson Calls for Election; Dollar Moves Higher on PMI Data

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Investing.com – The British pound slipped against the U.S. dollar on Friday in Asia after U.K. Prime Minister Boris Johnson said U.K. lawmakers should back an early Dec. 12 general election to get more time to scrutinize the Brexit deal, creating more uncertainties surrounding the country’s departure process.

The pair slipped 0.1% to 1.2842 by 12:05 AM ET (04:05 GMT).

EU officials will meet later in the day to decide how long they will extend Britain’s deadline to depart from the bloc.

Meanwhile, the that tracks the greenback against a basket of other currencies inched up 0.1% to 97.470.

The greenback was boosted after the Markit purchasing managers’ index came in higher than expected, at 51.5 compared to 51.1 in the prior month.

The data raised expectations that the Federal Reserve will cut borrowing costs for a third time this year even further.

The central bank’s policymakers will meet next week. U.S. President Donald Trump has pushed for even more rate cuts, pointing to falling interest rates at other central banks around the world.

“The Federal Reserve is derelict in its duties if it doesn’t lower the Rate and even, ideally, stimulate. Take a look around the World at our competitors. Germany and others are actually GETTING PAID to borrow money. Fed was way too fast to raise, and way too slow to cut!” the president tweeted.

The pair was unchanged at 1.1102 after the European Central Bank (ECB) left monetary policy unchanged on Thursday.

Outgoing ECB President Mario Draghi rejected criticism of his negative interest rate policy and his insistence on resuming outright purchases of government bonds from next month.

“The improvements in the economy have more than offset the negative side effects” on the financial system, Draghi said at his regular press conference.

He added that he wasn’t unduly concerned about the dissent against September’s multi-faceted package of easing measures, saying that all the key economic data from the euro zone in the course of the last month had justified the actions.

“I’ve taken this as part and parcel of the ongoing debate and discussions,” Draghi said.

The pair traded 0.04% higher at 108.64.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – U.S. Dollar Slips as Euro Still Lifted by Brexit Deal

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Investing.com – The U.S. dollar was lower against other currencies on Friday, while the euro was buoyed by hope that a Brexit deal will help mitigate risks of a recession in the bloc.

U.K. Prime Minister Boris Johnson made a deal with the EU on Thursday, which hinges on Northern Ireland applying a limited set of EU rules on some goods, with the U.K. only charging EU tariffs on goods passing through to EU markets.

The deal now must be passed by the British Parliament on Saturday. However, Northern Ireland’s Democratic Unionist Party said it is opposed to the proposed agreement, making it uncertain if the deal will be approved.

inched up 0.1% to 1.2897 as of 10:56 AM ET (14:56 GMT) while was up 0.2% to 1.1139.

Meanwhile the U.S. dollar dipped, as traders remained cautious after data showed the impact of the trade war has taken its toll on China.

China’s gross domestic product grew 6% annually in the third quarter, which was the slowest rate in 30 years. The news comes on the back of China trying to get more concessions from the U.S. before it signs a temporary phase 1 deal agreed on last week.

The , which measures the greenback’s strength against a basket of six major currencies, was down 0.2% to 97.172.

Elsewhere, the surged 1.4% to 0.1728 against the dollar after a five-day ceasefire against the Kurds in Syria was agreed on between President Recep Tayyip Erdogan and U.S. Vice President Mike Pence. However, reports have surfaced that the ceasefire may have already been broken.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – Yen Rises After BOJ Meeting; U.S. Dollar Slips as Fed Cut Rate as Expected

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Investing.com – The Japanese yen rose against the U.S. dollar on Thursday in Asia following the conclusion of the Bank of Japan’s meeting.

The pair fell 0.6% to 107.79 by 11:52 PM ET (03:52 GMT). The Bank of Japan kept its short-term rate target at -0.1%, but noted in a statement that “it is becoming necessary to pay closer attention to the possibility that the momentum towards achieving its price target will be lost.” BOJ governor Haruhiko Kuroda will provide a briefing later in the day.

“Taking this situation into account, the BOJ will re-examine economic and price developments at its next policy meeting, when it updates the outlook for economic activity and prices,” it said.

The slipped 0.1% to 98.058 after the Federal Reserve lowered its interest rates to the 1.75-2% range from the previous 2-2.25%. The move, which was widely expected by analysts, was the second rate cut this year.

The pair was down 0.5% to 0.6790 following mixed jobs reports released in the morning.

The pair lost 0.1% to 0.6312 after data showed the country’s economy grew at the slowest pace in more than five years in the second quarter.

The grew by only 2.1% from a year earlier and was the weakest annual growth since the fourth quarter of 2013, Statistics New Zealand reported on Thursday.

The New Zealand dollar initially rose after the report, but gave back its gains and currently trades in the red.

The pair rose 0.3% to 7.1029.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Dollar slips ahead of Fed rate decision, euro rises

© Reuters. FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul © Reuters. FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul

By Kate Duguid and Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – The U.S. dollar fell on Tuesday in range-bound trading on the eve of an expected interest rate cut by the Federal Reserve, weakened by a fall in oil prices and a stronger euro.

Oil prices dropped about 6% on Tuesday after Saudi Arabia’s energy minister said the kingdom had fully restored its oil production, following an attack over the weekend that shut down 5% of global oil output. That reversed some of the dollar’s gains on Monday when investors rushed into safe-haven assets.

The euro was up 0.59% at $ 1.1065 (), after an influential survey showed a brightening in German investor confidence. The ZEW index improved to -22.5 in September versus forecasts of -37 and the August reading of -44.1.

Thierry Wizman, global interest rates and currencies strategist at Macquarie Group, said he was seeing a bid in the forex market. “It’s maybe why the euro is doing a little better here,” he said. “You also had some good data in Europe as well that has sparked a bit of this euro rally today too.”

While many investors are expecting the Fed to announce a 25 basis point rate cut following the close of its two-day policy meeting on Wednesday, some believe it may be the last rate cut for a while absent more evidence of a U.S. economic slowdown.

“If the Fed does cut 25 basis points, then we think it will be the last time until we really do see signs of recession,” Brown Brothers Harriman strategists said in a note.

Against a basket of its rivals (), the greenback was 0.35% lower to 98.266.

The overnight rate, or the cost for banks and Wall Street dealers to borrow dollars , surged to 10% on Tuesday, the highest level since at least January 2003, according to Refinitiv data.

Analysts attributed quarterly corporate tax payments and settlement of $ 78 billion in Treasury debt supply for the spike on Monday in interest rates in the repurchase agreement market.

“This morning’s funding squeeze has put some upward pressure earlier in the dollar, but that is not likely to be a longer-term driver,” said Erik Nelson, currency strategist, at Wells Fargo (NYSE:) Securities in New York.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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