The dollar has been hovering at around a four-month high. It keeps on continuing to draw a lot of support from various treasury yields and it even has a lot of upbeat prospects as well. This can only mean good things for the US economy and it is leaving all of the rivals struggling. Of course, the Argentine Peso has also faced a downward turn and this is all related to the latest events that have been happening.
The market’s own attention has been on Donald Trump and his future regarding the international agreement on nuclear weapons. This agreement comes from Iran and he is currently threatening to withdraw from that. Trump is very excited to make an announcement on nuclear weapons and the whole economy expects him to withdraw from the deal. This has eased a lot of economic sanctions and this is said to have a huge impact on the bigger market. There are a lot of diminished concerns over the US and China trad spat and the actions in North Korea have certainly helped to shift all of the focus back onto the dollar. These fundamentals have been happening over the last month. Of course, if the US were to withdraw from the Iran deal, this could cause the whole dollar theme to become negative and this is especially the case when you look at the Argentine peso. The dollar dipped at 109.090 yen and it was going as high as 109.400 the night before. The yen really is sought after when political tensions are rife and with the market turmoil that is happening right now, there is no telling whether or not this will still be the case.
The dollar index was backed by over 6 major currencies. It was also 0.1% higher and this is the highest it has been since December. The greenback had its latest boost as the euro sank below $1.19 for the very first time this year. Industrial orders and even Euro zone investor sentiments also had a huge part to play in this as well. The euro fell flat at $1.1920 and it also plummeted down to 1.1897 the day before. This is the lowest that it has been in the last four months. The soft indicators from the industry are already trying to sink the expectations that are coming from the central bank and there is no saying whether or not interest will be raised any time soon. This has put a drag on the currency to say the least. When you look at the ever-rising Treasury yields, you’ll soon find that the data has bolstered the dollar over the last couple of weeks and that the US payrolls have certainly come into mind. There have been mixed strengths underlying the whole situation here and this is especially the case in the labour market.
The monetary policy has moved ahead and this has really supported it so far. The problem here is that there has been a lot of concern over the US interest rates and there has also been a sell-off between Latin-American currencies overnight as well. The Chilean, Mexican and Argentine peso has also fallen well over 1% and the Brazilian real has also gone down 0.84% as well. The Argentine peso’s own slide stood out and this is because the country’s bank had raised their rates on Friday.
There are a lot of market currencies that have taken a hit over the last few weeks and investors have worked hard to try and shed very high-yielding assets. They have done this with the expectation that the US inflation and even fiscal deficit could try and force the Fed to try and tighten their policies at a much faster pace. Of course, there is no telling whether or not this will actually happen and only time will tell if this is the case.
The Australian dollar was down by 0.25% and it fell down to $0.7498 after the domestic sales data was released for March. China trade figures for the month of April also helped to try and limit some of the losses and it was also used as some kind of proxy for China related trades.