Dollar Turns Higher, Yen Holds Weaker in Asia and Kiwi Up Despite Interest Rate Cut


On Wednesday, the dollar increased compared to the other majors currencies, as the dollar continued to rally from sudden losses posted following the news Donald Trump had been elected President of the United States.

EUR/USD retreated 0.83% to 1.0935, off a two month high of 1.1300 hit overnight.

The dollar initially decline following Trump was declared the 45th U.S. President, confounding expectations for a Democratic victory.

A Trump victory is observed as negative for financial markets as his policies are the source of improbability for the U.S. economy.

On Thursday, the yen held sluggish in Asia after mixed data on machinery orders, even though the Kiwi declared gains after a reduction in the benchmark interest rate as the central bank wanted to tamp down expectations of more to come.

USD/JPY adjusted at 105.75, up 0.08%, and AUD/USD traded at 0.7662, up 0.34%.

In Japan, core machinery orders for September dropped 3.3% MoM compared to a 0.8% decline observed for the 2nd straight monthly drop, and gained 4.3% YoY, compared to a 3.5% increase anticipated.

Previously, the Reserve Bank of New Zealand reduces the official cash rate 25 basis points to 1.75% on Thursday as widely anticipated and indicated a very mild easing bias while acknowledging numerous doubts may need action.

NZD/USD traded at 0.7299, up 0.29%.

Australia reported home loans in September jumped 1.6%, compared with a 2.0% decline expected MoM and invest housing finance gained 4.6% from a 0.1% increase the prior month.

The U.S. dollar index, which gauges the greenback’s strong point against a trade weighted basket of six major currencies, was last quoted at 98.66.

Following the news, European Central Bank Governing Council member Ewald Nowotny said the European Central Bank (ECB) is ready to interfere in the markets in an emergency. Japan reinstated its readiness to interfere in currency markets on Wednesday morning. On Tuesday, the country’s Finance Minister Taro Aso had stated that Tokyo will need to respond to moves in the currency markets if the U.S. election outcomes cause a sudden spike in the yen.

On Additional News

The Mexican peso pared some of its prior losses, but stayed on the downside, with  MXN/USD losing 8.24% to 0.0050.

Elsewhere, GBP/USD increased 0.32% to 1.2424, off one month peaks of 1.2548 reached earlier.

USD/JPY fell 0.64% to 104.51, after hitting a one month trough of 101.19, while  USD/CHF climbed 0.61% to 0.9839.

The Australian and New Zealand dollars stayed sharply lower, with AUD/USD down 1.26% at 0.7664 and with the NZD/USD tumbling 0.96% to 0.7315.

Meanwhile, USD/CAD increased 1.23% in 1.3452, just off a fresh seven month peak of 1.3525 hit earlier in the day.

The U.S. dollar index, which gauges the greenback’s strong point against a trade weighted basket of six major currencies, increased 0.55% at 98.41, the peaks since October 31 and off a one month low of 95.91 reached overnight.

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