The U.S. dollar’s woes continued overnight. It appears only markets closing for the weekend will give the greenback any reprieve.
The U.S. dollar’s woes continued overnight. It appears only markets closing for the weekend will give the greenback any reprieve. Indeed, the Bloomberg Dollar Spot Index fell for the seventh straight day, the worst run since the spring of 2011.
The greenback was also on the defensive versus the traditional safe-haven currencies, namely the Japanese yen. Shaky global equity markets, the threat of another North Korean missile launch this weekend, the ominous Hurricane of the coast of Florida and the massive earthquake in Mexico overnight equated to a perfect storm for the Japanese yen. The yen is 2.5% stronger versus the dollar since Monday’s open.
There is little in the way of economic news to help the greenback recover. The Fed’s Harker will speak in Philadelphia this morning but the statement is unlikely to move markets.
The Euro jumped to a fresh high and a level not seen since January 2015. The bulk of the common currency’s strength this week came after European Central Bank President Mario Draghi failed to strongly address the central bank’s worry of a strengthening Euro. The ECB did not change their policy at this week’s meeting but left the door open for adjustments to their quantitative easing at their October meeting. The ECB did downgrade their inflation forecasts but that did little to dissuade Euro-bulls from driving up the currency.
The British pound rose to a five-week high against the U.S. dollar as the American currency has fallen across the board. Data showed that U.K. manufacturing rose for the first time this year in July. However, a breakdown of the number showed that the construction sector fell for the fourth consecutive month. The sterling’s recent pop higher could be short-lived, however. Parliament will return from recess next week and focus is expected to shift back to Brexit and negotiations with the EU.