adminJOHANNESBURG. — The euro hit a three-month high of $1,1412, having gained 2 percent from a two-week low of $1,1181 touched a week ago. It last stood at $1,1382, down 0,1 percent on the day.
The dollar dropped 0,4 percent to as low as 106,78, having only fallen below 107 yen per dollar in the January flash crash and then last back in April 2018.
The yen has also benefited from investor nerves over tensions between the United States and Iran. Tehran said yesterday that US sanctions permanently closed the path to diplomacy between the two countries.
Selling in the dollar has accelerated since the US Federal Reserve signalled last week it would cut interest rates before year-end on mounting worries about an economic slowdown and the fallout from tariff wars between the United States and China.
US 10-year Treasury yields again fell below 2 percent in earlier trading, reducing the interest rate advantage the dollar has enjoyed over rivals in recent years.
“We expect the Fed’s pre-emptive cuts to temporarily weigh on the USD, especially versus G10 currencies, as the US rates advantage compresses amid an environment of slowing global growth,” said Marvin Barth, foreign exchange strategist at Barclays.
“However, the Fed’s ability to support an extended US expansion stands in contrast to clear sustained slowing — and rising risks — in China and Europe, implying a USD rebound in 2020.”
The dollar index fell to a three-month low of 95,843, having lost 1,7 percent during the latest five sessions, and was last down 0,1 percent at 95,909.
The euro was 0,3 percent firmer against the Swiss franc at 1,1108 francs, off almost 2-year lows of 1,1057 francs touched last week. — Reuters.
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