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Dollar slips for a fifth day as Nafta concerns ease
THE US dollar edged lower for a fifth consecutive day on Thursday as easing concerns over trade conflicts fuelled appetite for riskier currencies, though thin month-end markets checked losses.
Against its main rivals, it held at a one-month low of 94.52 as some investors bet a likely trade deal between the United States and Canada would reduce the pool of money that has flocked to the dollar in recent days on concerns that any escalation in trade conflict would be beneficial to the currency.
The United States and Canada expressed optimism on Wednesday that they could reach a new Nafta deal by Friday, though Ottawa said a number of tricky issues remained.
"Despite volatile overnight markets in Asia, risk appetite in currencies is broadly on the mend as trade war concerns seem to be receding, which should pressure the dollar lower," said Manuel Oliveri, an FX strategist at Credit Agricole in London.
Sterling led currency gainers on hopes that Britain and the European Union will agree on future trade ties before Brexit takes effect.
The EU's chief Brexit negotiator Michel Barnier said on Wednesday it was prepared to offer Britain an unprecedentedly close relationship, but that the bloc must prepare for a no-deal Brexit.
Exaggerated in part by the unwinding of recently built short positions, the pound has recaptured US$1.30 for the first time since Aug 6 and euro/sterling has fallen 1.3 per cent in the last two sessions to below 90 pence and is on track for its biggest two-day rise of 2018.
The euro remained firm against the dollar near the US$1.17 levels as investors bet a rise in risk appetite would boost the single currency though easing inflation data in Germany and Spain checked gains.
New Zealand's dollar fell as much as 1 per cent to US$0.6645 after business confidence sunk to a decade low in August.
The offshore Chinese yuan dipped 0.3 per cent to 6.8430 per dollar, extending its losses into a third session. REUTERS