Dollar Extends Losses on Lingering Trade Hopes

Friday,   13-Sep-2019   02:14 PM (IST)

The dollar extended losses in early trading in Europe Friday, as higher-yielding currencies advanced on hopes of at least a temporary truce to the U.S.-China trade war. President Donald Trump downplayed a Bloomberg report that his administration was preparing to do a temporary deal with China, potentially rolling back some of the import tariffs recently imposed on Chinese goods. The dollar index, which tracks the greenback against a basket of currencies, fell to its lowest in over a week in early trading and by 3:30 AM ET (0730 GMT) was at 98.07, down 0.2% from late Thursday. Both the euro and the British pound made solid gains, sterling rising above $1.2400 for the first time in seven weeks as the political and judicial problems of Prime Minister Boris Johnson embolden hopes that the country will avoid a disorderly exit from the European Union at the end of next year. The euro, meanwhile, is rising despite the European Central Bank’s best efforts to keep it weak with a package of monetary easing measures. By 3:30 AM, it was at $1.1104, up by three-quarters of a cent from immediately before the ECB’s policy decisions. Emerging currencies continued to rally against a backdrop of easier monetary policy in developed markets. The Russian ruble hit a seven-week high against the dollar, while the offshore Chinese yuan rose to its highest in a month. The Turkish lira was consolidating just below the three-week highs it hit on Thursday in the wake of the Turkish central bank's 325 basis-point interest rate cut. The mainland Chinese and Korean markets were closed Friday for holidays, while Japan’s is closed on Monday.