Yahoo Finance Dollar Subdued as Sterling, Euro Shine
Investing.com - The dollar retreated against its rivals Monday, pressured by a stronger pound amid lingering hopes of a UK-EU Brexit deal, while a firmer euro on positive remarks from European Central Bank Mario Draghi also hurt the greenback.
The U.S. dollar index, which measures the green against a trade-weighted basket of six major currencies, fell by 0.05% to 93.73.
Sterling rose as positive comments from German officials stoked investor optimism that the UK and EU would eventually reach an agreement on terms for Britain's future relationship with the bloc.
"Sterling has been helped because German officials said that a Brexit deal is still possible by November," said BK Asset Management. While the default position in the market "appears to be to assume that some sort of a deal will be done and only react if a no-deal Brexit looks inevitable," U.K. Prime Minister Theresa May's "desire to get a deal done" could be thwarted by "political consideration," the asset management firm added.
GBP/USD rose 0.41% at $1.3123.
Gains in the greenback were also kept in check by a stronger euro, which had followed an upbeat assessment of the eurozone from European Central Bank President Mario Draghi, who also reiterated the central bank's plan to end its massive bond-buying programme at year-end.
EUR/USD rose 0.15% to $1.1768.
An ongoing advance in emerging-market currencies compounded the dollar's timid start to the week as the Turkish lira and the South Africa rand enjoyed gains, despite analysts warning further gains could be stifled by rising U.S.-China trade tensions.
Emerging-market currencies are more vulnerable to U.S.-China trade war than other currencies as foreign investors are repatriating money amid rising yields in developed markets and emerging-market economies undershoot forecasts, according to ING.
China canceled trade talks with the United States, which were expected to take place this week after both nations launched fresh tariffs on each other last week.
That drummed up little support for the trade-sensitive yen as USD/JPY rose 0.04% to Y112.65.
Elsewhere, USD/CAD rose 0.24% to C$1.2947, shrugging off a surge in oil prices, which tends to boost the oil-sensitive loonie.
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