Economy

Growth worries bolster dollar as sterling dips before Brexit vote

The dollar index, which measures the greenback against a basket of six key rivals, gained 0.1 per cent to 97.412. The index was 0.3 per cent shy of its recent peak of 97.710 hit last Thursday, its highest since Dec. 14. It is up 1.3 per cent this year. The euro was basically flat at 1.1232 dollar. The single currency had fallen to its weakest level since June 2017 on Thursday, hurt by dovish signals from the European Central Bank (ECB). “After the ECB’s big downgrade of the growth outlook for the euro area, together with the weaker-than-expected Chinese export and import data, the worry over the global economy is re-surging again,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities. “That’s pushing down the euro and other currencies,” he said. “The U.S. is not particularly strong, but other areas are weak. That’s why the dollar is relatively strong.” Data […]

Published

on

News

The dollar index, which measures the greenback against a basket of six key rivals, gained 0.1 per cent to 97.412.

The index was 0.3 per cent shy of its recent peak of 97.710 hit last Thursday, its highest since Dec. 14. It is up 1.3 per cent this year.

The euro was basically flat at 1.1232 dollar. The single currency had fallen to its weakest level since June 2017 on Thursday, hurt by dovish signals from the European Central Bank (ECB).

“After the ECB’s big downgrade of the growth outlook for the euro area, together with the weaker-than-expected Chinese export and import data, the worry over the global economy is re-surging again,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“That’s pushing down the euro and other currencies,” he said. “The U.S. is not particularly strong, but other areas are weak. That’s why the dollar is relatively strong.”

Data on Friday showed U.S. employment growth almost stalled in February, with the world’s top economy creating a measly 20,000 jobs, far fewer than expected by analysts.

But traders found some hope in figures showing the U.S. employment rate slipped back below 4 percent and average hourly earnings accelerated by 0.4 per cent, helping to reduce the dollar’s losses during the previous session.

On Monday, most currencies stayed within well-trodden trading ranges before U.S. retail sales figures for January due at 1230 GMT and U.S. February inflation figures expected on Tuesday.

The big exception was the pound, which gave up one-third of a per cent to 1.2973 dollar after briefly dipping to a near three-week low on nervousness over Brexit.

The currency had already fallen for seven straight sessions.

Sterling came under renewed pressure after British foreign minister Jeremy Hunt said on Sunday Brexit could be reversed if lawmakers reject the government’s exit deal.

His remarks followed a warning from two major eurosceptic factions in parliament that Prime Minister Theresa May was likely to face heavy defeat in a parliamentary vote on Tuesday on whether to approve her EU exit plan.

The British leader is scrambling – so far unsuccessfully – to secure last-minute changes to an EU exit treaty ahead of the vote, which comes less than three weeks before the United Kingdom is set to leave the European Union on March 29.

“Speculators seem to be taking sell positions in the pound after it was bought for a short time as participants are awaiting the Brexit outcome,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

Mizuho’s Yamamoto said traders are trimming holdings of sterling on reduced expectations of a rate hike by the Bank of England, making the currency increasingly sensitive to near-term events, such as the parliamentary vote.

“These days, the UK inflation data isn’t as strong as before,” he said.

“The rate-hike expectation after the avoidance of the no-deal Brexit is fading away.”

Short Link: https://wp.me/pcj2iU-2nke

Abdullahi Mohammed

Abdullahi Mohammed: NNN is a Nigerian online news portal that publishes breaking news in Nigeria, and across the world. We are honest, fair, accurate, thorough and courageous in gathering, reporting and interpreting news in the best interest of the public, because truth is the cornerstone of journalism and we strive diligently to ascertain the truth in every news report. Contact: editor @ nnn.ng. Disclaimer.

Bird flu: Hong Kong suspends import of poultry products from Poland General Abdulsalami Dismisses News Linking Him To Purported Arrested Helicopter Education board trains 600 Ekiti teachers FRSC solicits motorists’ support to minimise crashes Rugby Africa Women’s Sevens Solidarity Camp Tunis – Final report of the two-day tournament Neymar extends PSG deal until 2025 Ogun Govt., Private Firms Empower 100 Youths Coronavirus – Nigeria: COVID-19 case update (May 8, 2021) Okowa mourns ex-minister Aisha Alhassan Ogun Govt. Re-Affirms Commitment To Boost Agric Sector UNIBEN warns admission seekers against racketeers Video press release: Rugby Africa 7-a-side solidarity camp – Day 2 “I believe in united Nigeria, not secession” — Umahi Walscheid takes the 8th place of the Qhubeka ASSOS team during the first stage of the Giro d’Italia US, foundation empower school girls with technological skills Gunmen attack police stations in Rivers kill 7 officers Police arrest 8 suspected kidnappers in Osun INEC engages stakeholders on polling points’ conversion in Oyo Opening remarks by the WHO DG at African emergency meeting on the COVID-19 situation Coronavirus – Zimbabwe: COVID-19 update (May 7, 2021) Ramadan: RMAFC Chairman Mbam urges Nigerians to be tolerant, brothers’ keepers B-roll: African rugby teams meet to prepare for the Olympics and Olympic draft – Day 1 Troops foil kidnap attempt, kill 1 bandit in Kaduna D’banj leads Nigeria to Motorsport Championships Super league – FIFA chief Infantino: “We need to face the problems in football together” Forum tasks FG on MSMEs growth Video press release: Rugby Africa Sevens Solidarity Camp: All matches will be broadcast live Saturday and Sunday on Rugby Africa’s Facebook page and Rugby Africa’s YouTube channel APC will take over Rivers Govt House in 2023- State Chairman Coronavirus – Nigeria: COVID-19 case update (May 7, 2021) FRSC enjoins passengers to caution reckless drivers Coronavirus – Daily update of the state of COVID-19 statistics in Zambia (May 7, 2021) Atiku mourns ex-Minister of Women Affairs, Alhassan Bird flu: Bauchi govt. kills about 27,000 birds to curtail spread Heirs Oil & Gas announces the appointments of its CEO and Board of Directors NCDC records 39 new infections, zero death Victor Campenaerts warming up for the Giro d’Italia time trial on Zwift Abuja residents count losses as FCDA demolishes illegal structures Rugby Africa Sevens Solidarity Camp: All matches will be broadcast live on Saturday and Sunday on Rugby Africa’s Facebook page and Rugby Africa’s YouTube channel Adimula Commissions PTI Skill Development Academy Coronavirus – Rwanda: COVID-19 update (May 6, 2021) JUSUN, PASAN strike to end soon – FG Coronavirus – Eswatini: COVID-19 daily update (May 6, 2021) Jagun emerges new president of computer professionals council Coronavirus – Eritrea: Ministry of Health announcement (May 6, 2021) Lagos to connect 100 schools to internet in May – Sanwo-Olu #EndSARS: Insurance companies pay N4bn claims – NIA NCDC confirms 28 new COVID-19 infections in Nigeria Coronavirus – Daily update on the status of COVID-19 statistics in Zambia (May 6, 2021) Manchester United cruise into Europa League final, Arsenal slump Mining Indaba expands advisory board for 2022