FOREX-Dollar Falls For Day 2 As Markets Sort Central Bank Movements
By David Henry and Joice Alves
NEW YORK / LONDON, December 16 (Reuters) – The US dollar fell for a second day on Thursday as markets moved towards risk while sorting through a series of central bank policy statements to find clues to upcoming differences between interest rates and strength economic.
The dollar index = USD against major currencies was down 0.2% for the day in morning trading in New York after central bank meetings including those in Europe, England, Switzerland and Norway.
The pound sterling rose 0.8% against the dollar after the Bank of England became the first major central bank to raise interest rates since the start of the pandemic.
The euro climbed more than 0.3% for a second day after the European Central Bank said it would continue to cut its bond purchases.
âWhat a day,â Marc Chandler, chief market strategist at Bannockburn Global Forex said of volatility.
The moves suggested that traders with short positions in the euro and pound sterling were closing their bets, Chandler said.
Movements of the euro against the dollar also appear to follow changes in the spread between two-year government bond yields on the two continents, Chandler said.
The euro EUR = EBS was up 0.1% for the last time at $ 1.1304.
The ECB has announced that it will cut bond purchases under its â¬ 1.85 trillion emergency pandemic purchase program and end the program as planned in March.
The ECB also highlighted continued support, lower than some analysts expected, thanks to its longer but more rigid Asset Purchase Program (APP).
“The ECB surprised the market with the relatively contained size of monthly APP purchases going forward,” said Jane Foley, head of foreign exchange strategy at Rabobank in London.
Yet, she said, “there is some conciliatory element in her statement regarding the reinvestment of the PEPP and the fact that it could be resumed.”
The accommodative elements in the central bank’s statements give markets the confidence to move towards riskier transactions.
Sterling GBP = D3 was last up 0.4% to $ 1.3323.
The U.S. Federal Reserve said on Wednesday it would end its bond purchases during the pandemic in March, paving the way for three expected interest rate hikes in 2022..
The dollar index initially rose on the news, peaking in three weeks. But dollar auctions have given way to risk moves towards other currencies.
Still, the dollar index at 96.1460 on Wednesday remained close to levels last seen in July 2020.
The Swiss National Bank kept its ultra-low interest rates unchanged while the Norges Bank raised its key rate.
The SNB kept its policy rate at -0.75% and the Norges Bank raised its policy rate to 0.50% and said more hikes would likely follow next year.
Cryptocurrency bitcoin BTC = BTSP slipped less than 1% to $ 48,622.
Currency Offer Price at 10:32 (1532 GMT)
US Close previous session
Percentage change for the current year
EUR = EBS
+ $ 1.1282
Dollar / Yen
JPY = EBS
Euro / yen
Dollar / Switzerland
CHF = EBS
Pound sterling / dollar
GBP = D3
CAD = D3
Australia / Dollar
AUD = D3
+ $ 0.7224
+ $ 0.7146
Euro / Switzerland
Euro / Pound
New Zealand dollar / Dollar
NZD = D3
+ $ 0.6833
+ $ 0.6759
Dollar / Norway
NOK = D3
Euro / Norway
Dollar / Sweden
Euro / Sweden
Global exchange rates https://tmsnrt.rs/2RBWI5E
(Reporting by David Henry in New York and Joice Alves in London; Editing by Hugh Lawson and Andrea Ricci)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.