Dollar under pressure

Dhaka,  Thu,  27 October 2016
Published : 12 Oct 2016, 12:59:21

Dollar pressured by sterling's rebound from selloff

The recently buoyant dollar came under pressure in Asian trading on Wednesday, as sterling partially rebounded from its dramatic losses in the previous session, reports Reuters.

The pound was up 1.5 per cent at $1.2301, after tumbling as low as $1.2086 on Tuesday, heading towards a 31-year low of $1.1450 hit on Friday as investors feared the impact on Britain from leaving the European Union.

Sterling benefited from a Bloomberg report that British Prime Minister Theresa May has accepted that Parliament should be allowed to vote on her Brexit plan.

"May will accept voting at the Parliament, which is giving the pound a short-term boost, but I'm not sure it's long-lasting," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

"Its latest fall was too much and too rapid, so it's natural to see some rebound," he said. "It seems the dollar's weakness against sterling today is affecting the other dollar currency pairs as well, which is also natural."

The dollar index, which tracks the greenback against a basket of six major rivals, slipped 0.2 per cent to 97.504 .DXY after rising as high as 97.758 on Tuesday, its loftiest peak since March.

The dollar edged down 0.1 per cent to 103.45 yen, while the euro was steady at $1.1052, recovering from a dip as low as $1.1049, its deepest nadir since early August.

The dollar had been on an upswing due to rising expectations that the US Federal Reserve would raise interest rates as early as this year, with markets pricing in around a 70 per cent chance of a hike in December.

- TM
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