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Dollar on defensive; commodity currencies stand tall

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by December 28, 2017 General

The dollar’s index against a basket of six major currencies last stood at 92.980, languishing near yesterday’s trough of 92.956, its weakest level since December 1. — Reuters picThe dollar’s index against a basket of six major currencies last stood at 92.980, languishing near yesterday’s trough of 92.956, its weakest level since December 1. — Reuters picSINGAPORE, Dec 28 — The dollar was on the defensive today, facing headwinds from a dip in US 10-year bond yields, while commodity-linked currencies were bolstered by this week’s rally in metal and oil prices.

The dollar’s index against a basket of six major currencies last stood at 92.980, languishing near yesterday’s trough of 92.956, its weakest level since December 1.

“Bond yields have pulled back from their peaks and the dollar is trading with a soft tone,” said Satoshi Okagawa, senior global markets analyst at Sumitomo Mitsui Banking Corporation in Singapore, referring to a pullback in US 10-year Treasury yields.

The US 10-year Treasury yield stood near 2.42 per cent , having come off a nine-month high of 2.504 per cent set last week. The US 10-year yield had slipped yesterday as investors rebalanced portfolios before year-end.

The euro edged up 0.1 per cent to US$1.1902 (RM4.85), having set a 3-1/2 week high of US$1.1911 yesterday.

Against the yen, the dollar eased 0.2 per cent to 113.19 yen , staying below a four-week high of 113.75 yen touched on December 12.

Currencies of commodities exporters remained firm, in the wake of this week’s rise in oil prices to 2-1/2 year highs and a surge in copper prices to four-year peaks.

The Australian dollar touched a fresh two-month high of US$0.7780 today, having gained 0.8 per cent so far this week.

The Canadian dollar last stood at C$1.2639. Yesterday, the loonie had touched a three-week high of CUS$1.2627.

A rise to levels beyond its early December high of CUS$1.2624 would send the Canadian dollar to its highest since late October. — Reuters

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