USD bounces, oil falls to new seven year low

The US dollar index, which measures the currency against six global rivals, was up 0.2 per cent on Monday to 97.79.

The 10-year Treasury yield was up 3 basis points to 2.157 per cent, while the Japanese yen fell 0.1 per cent to 121.1 per dollar. The euro fell 0.2 per cent to $1.0965.

Among notable moves up, the South African rand climbed 3.6 per cent after president Jacob Zuma unstitched his controversial decision last week to replace his incumbent finance minister, Nhlanhla Nene, with a relatively unknown lawmaker. Although Mr Nene has not been given his old job back, Pravin Gordhan, who was finance minister in the aftermath of the financial crisis, has now been reappointed to the position.

Brent crude, the international benchmark for oil, fell 0.9 per cent early Monday to $37.60 a barrel. West Texas Intermediate, the US benchmark, dropped 0.7 per cent to $35.39, a new low since February 2009. Gold prices were up $1.70 to $1,076.47 an ounce. Not all havens were doing particularly well, however.

In new data today, the closely-watched Tankan survey of Japan Inc. signalled optimism. The quarterly survey of more than 10,000 companies showed sentiment was better than anticipated, with the headline index for large manufacturers staying an optimistic +12 for last quarter. The positive result is likely to postpone any easing plans by the Bank of Japan until next spring at the earliest.

In China, the People’s Bank pushed the renminbi lower after allowing the currency to finish last week at a four-year low. The central bank weakened its fix, or mid-rate around which the renminbi is allowed to trade, by another 0.21 per cent, a sixth straight day in that direction.

In Asian equity markets today, Japan’s Nikkei 225 was leading the equity sell-off, falling 2.5 per cent at midday, while Hong Kong’s Hang Seng Index was down 1.4 per cent and Australia’s S&P/ASX 200 has shed 1.4 per cent. The only average to post a gain was the Shanghai Composite, which added half a per cent.

The post USD bounces, oil falls to new seven year low appeared first on FXTM Blog.

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