Dollar moves lower vs. rivals in cautious trade
Investing.com – The dollar fell to a more than one-week low against the other major currencies on Thursday, despite positive news on the U.S. political front, as tensions with North Korea continued to weigh.
The greenback found some support after U.S. President Donald Trump concluded a surprise deal with Democrats in Congress to extend the debt ceiling, providing government funding until December 15 and potentially avoiding an unprecedented default on U.S. government debt.
But sentiment on the dollar remained fragile after Federal Reserve official Lael Brainard said on Tuesday that the central bank should delay raising interest rates until it is confident inflation that is now “well short” of target will rebound.
The safe-haven yen and Swiss franc were higher, with USD/JPY down 0.27% at 108.94 and with USD/CHF retreating 0.37% to trade at 0.9530.
Markets were also still jittery after South Korea deployed an anti-missile system in response to North Korea’s sixth and largest ever nuclear test last weekend.
EUR/USD rose 0.35% to 1.1959, while GBP/USD added 0.12% to trade at 1.3059, just off the previous session’s four-week high of 1.3078.
Later Thursday, the European Central Bank was expected to leave interest rates unchanged. Market participants were especially awaiting comments by ECB President Mario Draghi, expected shortly after the decision, for any indications on when the central bank plans to begin winding down its asset-purchase program.
The Australian dollar was stronger, with AUD/USD up 0.10% at 0.8010, while NZD/USD eased 0.08% to 0.7195.
The Aussie briefly weakened earlier, after the Australian Bureau of Statistics said retail sales were flat in July, confounding expectations for a 0.3% rise.
A separate report showed that Australia’s trade surplus narrowed to A$460,000 in July from a revised A$888.000 in June. Analysts had expected the trade surplus to hit A$875,000 in July.
Meanwhile, USD/CAD slipped 0.16% to trade at 1.2208, not far from Wednesday’s 27-month trough of 1.2153.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.27% at 91.96 by 05:20 a.m. ET (09:20 GMT), the lowest since August 29.