Yen firm as global lockdown worries return, Aussie slips on easing hints

  • 10/15/2020
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SINGAPORE (Reuters) - The dollar and yen drew support on Thursday as rising coronavirus cases and scant progress towards a U.S. stimulus deal unsettled investors, while the Australian dollar hit a one-week low after the central bank chief hinted at easing to come. France has imposed curfews as autumn brings a steep rise in daily infections, prompting worries about a new wave of lockdowns around the world just as hopes for a shot in the arm from U.S. stimulus spending are fading. The safe-haven yen stood at 105.25 per dollar in early trade, a fraction shy of a two-week high of 105.04 made overnight. The greenback held ground elsewhere, save for against sterling which had jumped on signs of progress in Brexit talks. The Australian dollar fell half a percent to $0.7129, before paring some losses, after Reserve Bank of Australia Governor Philip Lowe mentioned bond buying and a small rate cut as among options for policy support during recovery. Lowe said Australia’s ten-year yield was among the highest in the developed world and the bank was studying what benefits could come from buying longer-dated debt. He said it was possible to move rates from a record low 0.25% to 0.1%. “These are pretty explicit policy options that are plausibly going to be considered,” said Westpac FX analyst Sean Callow. “There was enough vibe in there for the market to lean towards (thinking) that they will do something,” he said. “Anyone who was thinking about a November cut would be feeling better about it now.” Ten-year bond futures rallied 6.6 ticks to their highest since April after Lowe’s comments and money markets are priced for a November rate cut. Slightly better-than-expected Australian employment data on Thursday did little to shift easing expectations or lift the currency. Elsewhere, U.S. stimulus plans appear bogged down. “Getting something done before the election and executing on that would be difficult,” U.S. Treasury Secretary Steve Mnuchin said on Wednesday, adding that the he and Democrat House Speaker Nancy Pelosi are still “far apart” on their spending priorities. That has supported the U.S. dollar in the short term by weighing on investors’ sentiment and boosting demand for safer assets. Against a basket of currencies the greenback was steady at 93.400 and held at $1.1749 against the euro. The pound clung to a 0.5% overnight gain as the European Union and Britain were set to prolong Brexit talks past a mid-October deadline to try bridge stubborn gaps holding up a new trade agreement, according to sources and documents. “This was seen as a positive for sterling because there was some risk that (British Prime Minister Boris Johnson) might tell his EU counterparts that he was walking away,” said National Australia Bank’s head of FX, Ray Attrill. Sterling last sat at $1.3018. ======================================================== Currency bid prices at 8:52AM (052 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar $1.1749 $1.1745 +0.03% +4.80% +1.1751 +1.1741 Dollar/Yen 105.2550 105.1150 +0.12% -3.10% +105.2650 +105.1500 Euro/Yen 123.65 123.50 +0.12% +1.39% +123.6700 +123.4800 Dollar/Swiss 0.9134 0.9135 -0.03% -5.63% +0.9136 +0.9132 Sterling/Dollar 1.3018 1.3010 +0.08% -1.82% +1.3021 +1.3008 Dollar/Canadian 1.3151 1.3151 +0.02% +1.25% +1.3156 +1.3148 Aussie/Dollar 0.7136 0.7163 -0.37% +1.71% +0.7169 +0.7129 NZ 0.6653 0.6660 -0.11% -1.13% +0.6662 +0.6648 Dollar/Dollar All spots Tokyo spots Europe spots Volatilities Tokyo Forex market info from BOJ

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