Dollar halts slide as Mnuchin calls time on emergency funds

Article content continued

“Without the MLF, the market won’t collapse, but it will lack some resilience if its tested by a selloff or more pronounced credit fears.”

Also souring risk appetite, California ordered a curfew placed on all indoor social gatherings and non-essential activities outside the home across most of the state in a major escalation of measures to curb an alarming surge in coronavirus infection.

For over a week, the dollar has lost ground against riskier currencies due to coronavirus vaccine breakthroughs and hopes of reduced political uncertainty after the U.S. election.

The dollar index stood at 92.306, off Thursday’s low of 92.236, though it is still down 0.3% on the week.

The euro fetched $1.1874, flat on the day but not far from this week’s high of $1.18935 touched on Tuesday and up 0.3% on week.

The yen stood at 103.80 per dollar, retaining its weekly gain of 0.8%.

The reaction in currency markets, however, has been limited compared with the U.S. stocks and bond markets.

“There is a feeling that, at the end of the day, financial markets will remain solid and detached from the troubles in the real economy. A correction in stock prices was natural given their recent gains,” said Tatsuya Chiba, manager of forex at Mitsubishi UFJ Trust Bank.

“For now we have to see whether stocks markets’ retreat will prove to be a temporary one,” he said.

The British pound was on the defensive after the Times newspaper reported that European leaders will urge the European Commission to publish no-deal Brexit plans as the year-end deadline approaches.

Leave a Reply

Your email address will not be published. Required fields are marked *