Dollar edges higher as markets digest weekend events

Monday,   25-Sep-2017   12:10 PM (IST)

The dollar edged higher against other majors currencies on Monday, as markets were recovering from the weekend's elections in Germany and New Zealand, while concerns over tensions between the U.S. and North Korea seemed to subside. EUR/USD fell 0.24% to 1.1927 as Germany's federal election on Sunday showed growing support for a far-right party. Chancellor Angela Merkel won a fourth term in office on Sunday but will have to build a coalition to form a government as Conservatives lost support in the face of a surge by the anti-immigration Alternative for Germany (AfD). GBP/USD added 0.13% to trade at 1.3550, recovering from moderate losses posted on Friday after UK Prime Minister Theresa May gave few new indications on how Brexit will proceed. May proposed a transition period of around two years after the UK leaves the European Union, during which time access to the single market will continue on current terms. Following May's speech, ratings agency Moody's downgraded Britain's credit rating to Aa2, saying government plans to reduce debt had been knocked off course and that Brexit would weigh on the economy. Elsewhere, USD/JPY edged 0.13% higher and USD/CHF added 0.12% to 0.9704 as markets recovered from North Korea's threats last week to conduct a nuclear test in the Pacific Ocean. The kiwi was sharply lower, with NZD/USD tumbled 0.99% to 0.7268 after no single party won a majority New Zealand's elections over the weekend. The ruling National Party won the largest number votes, but neither of the major parties won enough seats to gain a majority in parliament, forcing a round of coalition talks that could last days or weeks. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, wasup 0.09% at 92.02 by 02:15 a.m. ET (06:15 GMT).