Dollar wallows at 13-month lows as ‘short’ bets grow
london — The dollar fell to a 13-month low against a trade-weighted basket of currencies on Monday, weighed down by softening US Treasury yields and weak data that is undermining the case for a further rise in interest rates this year.
Speculative “short” bets against the US dollar reached the highest since February 2013 last week, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday.
“A weaker dollar seems to be the path of least resistance given the soft data coming out of the US and the political uncertainty,” said Michael Hewson, chief markets strategist at CMC Capital Markets in London.
On Monday, the dollar index, measuring the currency’s strength against a basket of other currencies, fell to 93.823, its lowest level since June 2016.
While the index has drifted lower since peaking in March this year, its decline has accelerated in recent weeks thanks to falling US Treasury yields. Yields on ten-year benchmark US bonds have shed 16 basis points in two weeks.
A number of analysts have suggested playing the dollar-negative trade through the euro as improving economic data add to expectations of a gradual tightening of European monetary policy.
By 0737GMT on Monday, the euro was perched at $1.1647 — less than half a cent off an almost two-year high hit earlier in Asian trade. — Reuters