CURRENCIES: Dollar Skid Continues, On Track For Third Consecutive Losing Session
11 October 2018 - 4:20PM
Dow Jones News
By Aaron Hankin
PBOC sets yuan lower, inching dollar toward 7.00 yuan
The U.S. dollar is trading lower Thursday, on track to book its
third consecutive losing session.
The ICE Dollar Index, a measure of the dollar against six of its
nearest rivals, is trading down 0.4% to 95.129, a 10-day low.
The greenback, which tends to rise in turbulent times, is
lagging as the public spat between President Donald Trump and the
Federal Reserve
(http://www.marketwatch.com/story/trump-says-the-fed-has-gone-crazy-after-the-dow-tumbles-830-points-in-one-day-2018-10-10)
continues. On Thursday, Trump said the Fed was "getting a little
too cute,
(http://www.marketwatch.com/story/trump-calls-fed-too-cute-in-third-straight-day-of-criticism-2018-10-11)"
adding "it's ridiculous what they're doing."
Trump's comments come after U.S. equities had their worst day in
more than eight months Wednesday, led by the tech-heavy Nasdaq,
which slumped more than 4% and closed below its 200-day moving
average for the first time since July 2016.
"The USD is buckling under political pressure from Presidents
Trump's 'Fed is crazy' comment, but indeed the severity of this
equity rout could bring the hawkish Fed narrative into question,"
wrote Stephen Innes, head of APAC trading at Oanda.
Read:What Trump's tirade against 'loco' Fed means for the
markets
(http://www.marketwatch.com/story/what-trumps-tirade-against-loco-fed-means-for-the-markets-2018-10-11)
The Japanese yen, arguably the No. 1 haven currency, was trading
at Yen112.34 versus Yen112.26 on Wednesday. Earlier in the session,
the yen traded below Yen112 to Yen111.98, its lowest level since
Sept. 18.
See:Treasury's Mnuchin warns China against currency devaluation
as yuan falls: report
(http://www.marketwatch.com/story/treasurys-mnuchin-warns-china-against-currency-devaluations-as-yuan-falls-report-2018-10-10)
Elsewhere, the euro has continued its revival. After making a
three-week low on Monday, the shared currency was trading 0.6%
higher at $1.1564 compared with $1.1520 late Wednesday.
"There's enough risk weighing down the euro to sink a
battleship, but the single unit has caught a reprieve from
broad-based USD selling rather than any significant shift in EU
sentiment. Which makes it a prime target for a beat on [Thursday's]
CPI," Innes continued.
The euro spiked to an intraday high near $1.16 after economic
data showed the consumer price index rose 0.1% for September.
Read:Inflation rises slower than forecast as housing costs
offset by used vehicle tumble, CPI shows
(http://www.marketwatch.com/story/housing-costs-nudge-inflation-higher-in-september-cpi-shows-2018-10-11)
The People's Bank of China nudged the yuan to 6.9098 per dollar,
from 6.9072 on the prior session, inching toward the psychological
level at 7.00.
"Amid the continued trade spat between the U.S. and China, more
losses are expected in the China yuan with focus on the
psychological 7.00 level. Offshore one-year non-deliverable
forwards contracts (NDFs), a proxy for forward-looking market
expectations of the yuan's value, trades at 7.0490 and thus
confirming a potential move through the 7.00 area," wrote Justin
McQueen, currency analysts at DailyFX.
Check out: Here's why traders think the Chinese yuan could reach
a record low against the dollar
(http://www.marketwatch.com/story/heres-why-traders-think-the-chinese-yuan-could-reach-a-record-low-against-the-dollar-2018-10-09)
The British pound is holding steady above $1.32 as concerns
around Brexit have been put on the back burner given the turmoil in
global equities. Sterling was last changing hands as $1.3232
compared with $1.3192 Wednesday.
The Canadian dollar is trading marginally higher at C$1.3049
compared with C$1.3068 on Wednesday.
(END) Dow Jones Newswires
October 11, 2018 11:05 ET (15:05 GMT)
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