U.S. Dollar Plummets to 5-Week Low on Interest Rate Speculation

0
123

U.S. Dollar Plummets to 5-Week Low on Interest Rate SpeculationThe dollar fell to a five-week low versus the yen after weak U.S. economic report fuelled speculation that the Federal Reserve will maintain the interest rates near zero. Yields on U.S. Treasuries also fell.

The U.S. currency fell 0.3 percent to trade at 101.40 yen as of 8:34 a.m. in London after earlier tumbling to 101.32, its weakest level since May 21. The dollar has declined 0.7 percent since last Friday, and appears headed for its fastest decline against the yen since the weekly session ended April 11. The dollar has fallen against the yen after it plunged under its 200-day moving average for the 3rd consecutive day.

“The market is giving up on some long dollar positions,” Greg Gibbs, a Singapore-based head of Asia-Pacific markets strategy at Royal Bank of Scotland Group, told Bloomberg. “Yields lower in the U.S. in recent sessions does contribute to the down move in dollar-yen.”

**relatedarticle**

The dollar also fell 0.1 percent to trade at $1.3623 a euro, while the yen rose 0.2 percent to 138.14 per euro.

Data released this week revealed that  the U.S. economy declined more than expected in the first three months of the year, while durable goods orders fell more than expected  in May.

The New Zealand dollar temporarily touched half a cent near the highest record. The currency, which was trading 0.2 percent lower at 87.68 U.S. cents, had earlier surged to 87.94, close to the all-time high of 88.43 U.S. cents that was recorded in August 1, 2011, the most since the country abolished exchange rate controls in 1985.

The South Korean won advanced 0.3 percent to end the day at 1,013.60 per dollar in Seoul trade following reports that the country’s current-account surplus expanded and foreigners invested more in the local economy. The won had earlier rose to 1,013.35, the highest level since August 2008. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com