Group of 10 currencies will be driven by the U.S.-China trade war and actions by...
BENGALURU - Group of 10 currencies will be driven by the U.S.-China trade war and actions by the U.S. Federal Reserve in coming months, while economic developments in other parts of the world are likely to take second stage, a Reuters poll found.
The dollar index .DXY has held its ground and is up over 2% this year, despite one Fed rate cut and expectations for more. “The recent escalation in the trade war between the U.S. and China is a dollar positive story. We are relatively pessimistic and feel we are unlikely to get a trade deal before the end of this year, which should keep the dollar well bid,” said Lee Hardman, currency analyst at MUFG in London.
Currency speculators cut their bets in favor of the dollar in the latest week to the lowest level since June 2018 but were still net long on the dollar, according to data from the U.S. Commodity Futures Trading Commission. The dollar slipped and risky currencies flourished on Thursday amid optimism the United States and China would find a solution to their trade feud. Easing tensions in Hong Kong and ebbing fears of a no-deal Brexit provided relief to investors worried about global growth.
It is view they have wrongly held since early last year, and was at least partly based on the idea that the dollar may have risen too far .The euro was forecast to gain around 4% on the dollar to trade at $1.15 in a year from near $1.11 on Thursday despite the European Central Bank expected to announce a slew of stimulus measures next week.
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