You are here

US dollar mostly steady as traders await Trump news conference

Wednesday, January 11, 2017 - 08:13

40478828 - 08_11_2016 - GLOBAL-FOREX-INT_.jpg
The US dollar was little changed against a basket of major currencies on Tuesday on nervousness ahead of US President-elect Donald Trump's first news conference set for Wednesday, while the Mexican peso hit a record low.

[NEW YORK] The US dollar was little changed against a basket of major currencies on Tuesday on nervousness ahead of US President-elect Donald Trump's first news conference set for Wednesday, while the Mexican peso hit a record low.

Investors fretted that Mr Trump, who takes office on Jan 20, could shake markets by taking an aggressive line on issues such as trade policy and relations with China.

The US dollar index, which measures the greenback against a basket of six major currencies, has climbed more than 4 per cent since Mr Trump's win on Nov 8 as investors have bet his promised fiscal expansion will boost inflation and growth, leading to a faster pace of Federal Reserve interest rate increases.

Speculators had boosted net long bets on the US dollar for a third straight week in the week ended Jan 3, data from the Commodity Futures Trading Commission and calculations by Reuters showed on Friday.

Powered by GET.comGetCom

Uncertainty ahead of Mr Trump's comments, however, led to muted moves in currency pairs. Analysts also said traders were watching hearings for the Republican president-elect's choices for senior administration posts.

"In order to jumpstart US manufacturing and create a more level playing field when it comes to relative competitiveness, Trump may suggest a weaker dollar policy," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.

The US dollar index was last up 0.08 per cent at 102.010. The index hit a 14-year high on Jan 3 of 103.820. The greenback fell as much as 0.7 per cent against the yen to 115.21 yen, near Friday's more than three-week low of 115.04 yen.

The euro, which hit an 11-day high of US$1.0626 in early trading, was last down 0.14 per cent at US$1.0557.

The Mexican peso hit a fresh record low against the US dollar of 21.7685 pesos as traders avoided exposure to the currency ahead of Mr Trump's news conference.

The peso has fallen on worries over the prospect of Mr Trump's protectionist policies.

"Mexico remains the primary victim of the election result, and I anticipate we'll see more of it," said David Gilmore, partner at FX Analytics in Essex, Connecticut.

Sterling steadied after hitting US$1.2107 in early trading, its lowest level since Oct 25, and was last at US$1.2164.

Sterling had fallen on worries that Britain would undergo a "hard" exit from the European Union, in which immigration controls get priority over access to the single market.

REUTERS

Powered by GET.comGetCom