Dollar and yen rise as tech selloff sends investors to safety
By Tom Westbrook SINGAPORE (Reuters) - The dollar held its gains on Wednesday, as a stockmarket slide spilled over into selling of riskier currencies and an oil slump weighed on commodity currencies, while fresh Brexit turmoil pushed the pound to a six-week low.
By Tom Westbrook
SINGAPORE (Reuters) - The dollar held its gains on Wednesday, as a stockmarket slide spilled over into selling of riskier currencies and an oil slump weighed on commodity currencies, while fresh Brexit turmoil pushed the pound to a six-week low.
The greenback sat by a one-month high against a basket of rivals <=USD> and edged up against the pound, euro and the kiwi.
In early trade the safe-haven Japanese yen
"U.S. equity futures will likely be a guide to currencies today," said Commonwealth Bank of Australia's head of international economics, Joe Capurso.
"The more equity futures fall, the larger the strength in the dollar and the yen," he said, with a European Central Bank meeting on Thursday a possible driver of even more dollar gains.
Some pressure came off riskier currencies as futures climbed off early session lows, with Nasdaq 100 futures
The overnight currency moves came with gains in the bond market as a tech selloff, which began last week with no apparent trigger, begins to drive broader risk aversion. [MKTS/GLOB]
The risk-sensitive Antipodean currencies fell to two-week lows, before climbing back to flat as stock futures pared losses. The Australian dollar
A nearly 8% drop in U.S. crude prices has also weighed on oil exporters' currencies, with the Canadian dollar
Sterling, however, has been the largest loser as fears grow that Britain is preparing to undercut its Brexit divorce treaty.
Britain will set out its blueprint for life outside the European Union on Wednesday, publishing legislation a government minister acknowledged would break international law in a "limited way" and which could sour trade talks.
The tech selloff, which has led Wall Street indexes on their sharpest three-day drop since March has also added some impetus to a dollar bounce that analysts have doubted.
The dollar has now lifted 1.4% from its early-September trough, making particular progress against the euro in the wake of comments from ECB chief economist Philip Lane, who said last week that the exchange rate mattered to monetary policy.
The ECB meets on Thursday with any comments on the currency to be closely parsed.
"Lane appears to have succeeded in drawing a line in the sand at $1.20 at least for the time being," said Rabobank senior FX strategist Jane Foley. "We see scope that euro/dollar could dip further towards the $1.17 level on a one-month view."
(Reporting by Tom Westbrook; Editing by Shri Navaratnam)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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