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Dollar steady, yen at October highs after U.S. stocks slide

Thursday,   11-Oct-2018   09:05 AM (IST)

The dollar was steady against a basket of currencies on Thursday after spooked investors drove U.S. stocks to their worst fall in nearly eight months overnight.The dollar index  a gauge of its value against six major currencies, fell 0.11 percent to 95.407 on Thursday, after hitting a high of 95.79 in the previous session.The safe-haven yen strengthened to 112.25 against the dollar, its highest this month, taking heart from risk aversion in the wake of warnings from the IMF over global growth and financial stability.The U.S. Federal Reserve's apparent determination to raise interest rates over the next 12 months has driven up U.S. Treasury yields, which have been further bolstered by good economic data.Expectations of hawkish rate rises may have been at work on Wednesday when sellers sent the Nasdaq to close at 7044.49, its lowest level since early July.The S&P 500 and Dow Jones Industrial Average weren’t too far behind, both falling more than 3 percent.Benchmark 10-year yields cooled off from a seven-year high of 3.261 percent hit on Tuesday to 3.1667 percent.The euro rose 0.16 percent to 1.1536 on Thursday after hitting a low of 1.1477 in the previous session.EU Brexit negotiator Michel Barnier said on Wednesday the parties had agreed on much of the withdrawal agreement ahead of a summit of the bloc's 28 national leaders next week.But the euro's gains are likely to be limited with markets worried about the sustainability of Italy's public finances, despite Italian Economy Minister Giovanni Tria stating that the government would do everything in its power to regain the confidence of financial markets.Sterling traded at $1.3207, its highest in a week, as investors bet on a reasonably British departure from EU in March.The pound has gained more than 2 percent versus the dollar over the last five trading sessions.The Australian dollar , often viewed as a gauge of global risk appetite, traded flat at 0.7068 on Thursday.The New Zealand's dollar , or kiwi, traded at 0.6454, near a multiyear low of 0.6422 seen on Monday.