The greenback rose against a basket of six other major currencies on Monday as investors booked profits on a rally in riskier assets last week while persistent economic worries boosted the U.S. dollar’s safe-haven appeal. In late New York trading, the ICE future dollar index added 0.41 percent to trade at around 87.782, however, the greenback weakened versus the yen due to falling global stock markets and dropped to session low of 97.26.
The single currency reversed from a one month high of 1.3670 against the dollar as risk aversion reduced and fell to as low as 1.3557 before stabilising, however, it strengthened versus the British pound and surged to an intra-day high of 0.9038 as last week’s unexpected Bank of England decision to expand its quantitative easing program by 50 billion pounds continued to weighed on sterling.
High-yielding currencies such as the New Zealand dollar and Australian dollar fell against the dollar and yen as risk aversion returned to the market. The New Zealand dollar fell from session highs of 0.6127 and 60.34 to as low as 0.6012 and 58.46 versus dollar and yen respectively, while Australian dropped from 0.7714 to 0.7582 against the dollar and from 76.11 to 73.79 versus the yen before stabilising.
The Dow Jones industrial average and the S&P’s 500 index weakened on Monday due to profit taking after two-month run-up, while news of several share offerings weighed on banks as investors worried abort their dilutive impact on current shareholders. By the end of the day, the Dow Jones index dropped 155 points, or 1.82 percent, to 8,463, while S&P 500 fell 19 points to 909.
Economic data releases on Tuesday include Japan leading indicators, U.K. BRC retail sales, RICS house prices, DCLG house prices, trade balance, industrial production and manufacturing, German CPI, HICP and WPI, Canada trade balance and Fed budget.