Dol­lar slumps ahead of Fed meet­ing’s min­utes re­lease

The Myanmar Times - - International Business -

THE dol­lar slumped yes­ter­day as deal­ers awaited the re­lease of min­utes from the Fed­eral Re­serve’s last meet­ing, while an overnight jump in oil prices lifted emerg­ing Asian cur­ren­cies.

The US cen­tral bank is due to re­lease to­day the min­utes of its July 26-27 meet­ing, when it left key in­ter­est rates un­changed.

But the Fed ac­knowl­edged an im­proved per­for­mance in the world’s top econ­omy, sug­gest­ing a rate hike may still be on the hori­zon this year.

A rise in bor­row­ing costs would tend to stoke de­mand for dol­lar­de­nom­i­nated as­sets, boost­ing the green­back.

“The mar­ket re­ally has not moved to price in any more chance of Fed tight­en­ing,” Daniel Katzive, head of for­eign-ex­change strat­egy for North Amer­ica at BNP Paribas, told Bloomberg News.

“That’s sapped the dol­lar of any mo­men­tum.”

In Tokyo the dol­lar slipped to 100.44 yen from 101.25 yen in New York and its low­est level in about a month, while the euro was at $1.1191 against $1.1183.

The pound traded at $1.2902 against $1.2883 in the US, still near its weak­est lev­els in more than 30 years touched in the af­ter­math of the Brexit vote.

The dol­lar also dropped against higher-yield­ing emerg­ing mar­ket cur­ren­cies, which ben­e­fited from stronger oil prices and an uptick in in­vestor sen­ti­ment.

The oil-linked Malaysian ring­git, the South Korean won, the Sin­ga­pore and Tai­wan dol­lars, the Philip­pine peso and the In­done­sian ru­piah all rose against the US cur­rency in yes­ter­day’s trade.

“A re­cov­ery in risk ap­petite is send­ing emerg­ing cur­ren­cies stronger,” said Wu Mingze, a Sin­ga­pore-based for­eign-ex­change trader at INTL FCS­tone Inc.

“Com­modi­ties are ral­ly­ing, lift­ing stock prices and com­mod­ity cur­ren­cies.” –

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