Dollar Bounces Amid Improved Market Sentiment 12-9-2017

The Dollar Index Registers a ‘U-shaped’ Rebound. The greenback managed to catch a decent bounce as worries over North Korea and Hurricane Irma receded while U.S. officials tried to keep the spotlight on tax reform.

Dollar Pulls Away from 2-1/2-yr Low Vs Euro as Risk Sentiment Improves. The greenback held to large gains on Tuesday following a sharp rebound against the euro. The euro was little changed at $1.1962 after shedding 0.7 percent overnight. The common currency had reached $1.2092, its highest since January 2015, on Friday when the dollar suffered a broad retreat.

Dollar Sharply Rebounds Against Yen. The yen slumped back in the losers’ bench as risk-on vibes were in play and traders cut down on their lower-yielding holdings. The dollar was steady at 109.345 yen after rallying 1.4 percent overnight, its biggest one-day surge since mid-January. It had slumped to a 10-month low of 107.320 yen on Friday, when Hurricane Irma threatened Florida and as financial markets braced for North Korea’s founding day on Sept. 9.

Franc Stays Flat After Rally. The Swiss franc, often sought in times of global risk aversion along with the yen, was flat at 0.9558 per dollar after its rally to a two-year high of 0.9421 on Friday.

Oil Positively-Correlated Canadian Scored Strong Gains. The Loonie is already being supported by hawkish BOC expectations but it got another kick higher from expectations of another OPEC deal extension.

Pound Gains Vs Euro Ahead of Thursday’s BoE Policy Meeting. Sterling fared better against the euro, aided by speculation that the Bank of England may sound more hawkish on interest rates in defense of the currency at its policy meeting on Thursday. The pound hovered close to a one-month high of 90.75 pence per euro set overnight.

The Australian Dollar Edges Down After Its Rally on Friday. The Australian dollar was 0.05 percent lower at $0.802 , extending its retreat from a two-year peak of $0.8125 scaled on Friday.

Oil Rallies on Potential OPEC Deal Extension. Crude oil is also in the green so far, thanks to talks of an extension on the OPEC deal extension. Recall that the oil cartel already agreed to keep a cap on production six months longer than their original end-date to March 2018 in an effort to ensure that the commodity price stays supported.

Traders Unwound Their Safe-Haven Holdings. Safe havens have been lackluster these past two days as capital returned back to risky assets. Precious metals returned some of their recent gains. The gold price tumbled 1.5% to the US$1,326 area.

Watch Out Today For:

08:30 am GMT: GBP Consumer Price Index

By MEX Group Team

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