The dollar has reached new milestone lows against major currencies, including the euro and yen, as China’s central bank guided the yuan higher. The yuan hit an almost four-month high against the dollar, prompting broader weakness for the greenback. The euro rose to $1.0963, its highest since mid-August, while the yen reached its strongest level in seven weeks at 147.5 per dollar. China’s firm currency fixing, coupled with a Bloomberg report on forthcoming support for the property sector, has influenced positive sentiment. The dollar index, down in seven of the past eight sessions, hit a 2-1/2-month low at 103.2.
Key Points:
- The dollar has slipped to fresh milestone lows against major currencies, driven by China’s guidance to strengthen the yuan.
- China’s central bank set the midpoint of the yuan’s trading band at its strongest since Aug 7, with the yuan hitting an almost four-month high against the dollar.
- The euro rose to $1.0963, its highest since mid-August, and the yen reached its strongest level in seven weeks at 147.5 per dollar.
- China’s firm currency fixing, along with a Bloomberg report on forthcoming support for the property sector, has boosted stocks and market sentiment.
- US yields have fallen as anticipation grows that US interest rates have peaked, while the yen shows signs of turning, and the Aussie benefits from additional tailwinds.
- Minutes of Australia’s November policy meeting reveal concerns about inflation expectations becoming unmoored if interest rates are not raised.
- The dollar index, down in seven of the past eight sessions, broke below its 200-day moving average, hitting a 2-1/2-month low at 103.2.
- Focus on Fed minutes and a speech from ECB President Christine Lagarde, with analysts cautioning on the dollar’s downward momentum.
- Mizuho Bank’s Vishnu Varathan notes the need for a reality check, considering the Fed’s hawkish bias is influenced by yields.
- Argentina’s markets are set to resume domestic trade after the election of libertarian Javier Milei as president.
[Note: This summary provides an overview of the article and includes key points. For the full context, it is recommended to refer to the original article.]
