Dollar extends 3-wk losing streak as US tax plan eyed

LONDON: The dollar drifted lower against a trade-weighted basket of its rivals yesterday, extending a threeweek losing streak, though investors were wary of driving the currency lower before a couple of event risks this week.

Today, the US Senate Banking Committee holds a hearing to confirm the nomination of Jerome Powell to succeed Janet Yellen at the helm of the Federal Reserve while the US Senate resumes deliberations on the tax plan this week after the Thanksgiving break.

“There is some caution after the dollar tumbled last week with the potential for some news on the US tax front and as Powell gets sworn in but markets are broadly in narrow ranges,” said Alvin Tan, an FX strategist at Societe Generale in London. The dollar index edged lower to 92.715, near twomonth low of 92.675 touched on Friday. Sterling fetched $1.3344, holding near Friday’s two-month peak of $1.3360. With major global currencies hemmed in tight trading ranges, the South African rand was the standout performer in London trading.

The currency jumped by as much as 3 percent against the greenback as markets took some relief from Moody’s decision to only place South Africa on review for downgrade as an outright cut would have meant the country would have lost its position in some key global bond indexes.

Heavy selling of blue-chip shares dragged China’s stock markets sharply lower yesterday as rising bond yields spooked investors. But the fallout seemed to be limited to the mainland with Hong Kong’s stocks lagging the drop there and overseas bonds relatively more stable. — Reuters