Dollar Losing Streak Reaches Sixth Day as Yen Draws Haven Bids – 22 March, 2017
The dollar fell to near its low of the session while the yen rose versus all of its G-10 peers amid a surge in global risk aversion tied to concerns over potential delays to President Donald Trump’s fiscal stimulus plan.
The yen posted strong gains against higher-yielding currencies as the wave of risk aversion prompted a slide in many global equity markets. Traders are concerned that any delay to the U.S. health-care reform bill, which is scheduled for a vote on Thursday, may push back tax reform that is seen as the cornerstone of Trump’s pro-growth agenda. Meanwhile, the pound pared losses after falling to a fresh session low following a London terror incident near Parliament.
- The JPY hit a fresh 2017 high vs the dollar while gaining almost 1% against the Australian dollar as investors unwound riskier FX trades, according to traders familiar with the transactions who asked not to be identified because they are not authorized to speak publicly. The Australian dollar fell with other commodity-related peers amid declines in base and industrial metals tied to global growth concerns. Yen gains may have been magnified by repatriation ahead of the Japanese fiscal year-end on March 31.
- The dollar is down ~0.1% as measured by the BBDXY as it skids for a sixth day, the longest losing streak since early November; earlier, the greenback was higher vs all G-10 peers save JPY and CHF, which gained amid haven demand.
- USD/JPY fell to 110.73, eclipsing technical support at the prior YTD low 111.60, with the dollar’s decline slowed by bids ahead of 111.00, traders in London said; further bids are positioned closer to 110.00; an intraday rebound in the pair was capped just above 111.00 as hedge funds faded the bounce, traders said.
- GBP trading near 1.2480, reversing a drop to 1.2424 that was seen amid initial reports of a terror attack in London; bids placed near the 100-DMA at 1.2416 cushioned the drop, traders said
- EUR/USD trading ~1.0800 after rising to a session high of 1.0825 , near the 1.0829 YTD high; EUR earlier dropped to a session low at 1.0776 as stop-loss sell orders were tripped below 1.0780
- EUR gains vs USD have been subdued by the still-uncertain political outlook in the euro area as France, Germany and Italy brace for elections later this year and are further slowed by a layer of offers stacked ahead of 1.0830, traders said
Source: Bloomberg