On Wednesday, the greenback inched higher against a basket of major currencies in advance of a news conference by U.S. President-elect Donald Trump in which he is anticipated to spell out more regarding his plans for the economy.
The dollar index increase 0.2% to 102.18 (DXY).
The greenback rally generated by Trump’s surprise victory in the November election has shown indications of fading, as the index has gone from a 14-year high of 103.82 scaled on Jan. 3 to a low of 101.30 over the previous week.
The euro declined 0.1% at $1.0545 after brushing a 10-day peak of $1.0628 overnight.
The greenback firmed 0.3% to 116.100 yen. It had suffered two days of losses against the safe-haven Japanese currency.
“Currency pairs, settled into a narrow range ahead of Trump’s news conference – his first since the election – which is due to start at around 11:00 EST (1600 GMT) neared, according to the report.
“I did not expect the Tokyo session to be this quiet,” said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo. “It reflects the level of caution prevailing in the market before Trump’s appearance.”
“During the past two months,anticipations that the Trump administration would enact economic stimulus gauges backed by massive fiscal spending have taken Wall Street to record highs, U.S. debt yields to levels unseen since 2014 and the dollar index to the 14-year high, according to the reports.
“Against that backdrop, financial markets are keen to see how Trump will follow through on campaign pledges.”
“The dollar is set to resume the Trump rally if he provides specifics of stimulus measures, notably those related to tax cuts, which appear achievable,” stated by an strategist.
“On the other hand, the market also focuses on potential risk factors, like Trump taking a tough stance against China. That could prompt the dollar to fall against the yen.”
Somewhere else in the markets, sterling plunged 0.1% to $1.2168 to inch back towards a two-month low of $1.2107 set overnight. This week, uncertainties about the terms of Britain’s exit from the European Union have kept the currency under heavy pressure.
After popping up to $0.7385 overnight, the Australian dollar was flat at $0.7372, its highest since mid-December. This week, the U.S. dollar stall and increase in iron ore and coal prices have strengthened the Aussie this week.
After touching a four-week peak of $0.7048 on Tuesday, the New Zealand dollar held steady at $0.6987.
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