Amid less hawkish stance taken by the U.S. Federal Reserve on rate hikes, the greenback eased against peers on Tuesday
Sterling edged toward this month’s highs, improved risk sentiment with Rishi Sunak set to become Britain’s prime minister.
Meanwhile the euro threatened to hit $0.99 for the first time since Oct. 6 ahead of Thursday’s European Central Bank (ECB) policy meeting.
Following two consecutive days of Bank of Japan (BOJ) intervention straddling the weekend, the Japanese Yen ended firmer on the stronger side of 149 per US dollar. At 149.00 yen, the dollar was down from the 32-year high of 151.94 on Friday. The greenback dropped as low as 144.55 on Friday and 145.28 on Monday.
Whilst the dollar index eased to 111.78, taking it close to Friday’s low of 111.68, the weakest level since Oct. 6.
After S&P flash PMI data overnight showed U.S. business activity contracting for a fourth straight month in October, the latest evidence of an economy slowing in the face of high inflation and rising interest rates, the US dollar softened.
After having reached multi-year peaks at 4.338 per cent at the end of last week, yields on U.S. 10-year Treasury notes retreated to 4.217 per cent in Tokyo.
Sterling strengthened by 0.24 per cent to $1.13105, heading toward the high this month of $1.1493 from Oct. 5.
So too was the euro, appreciated 0.16% to $0.98875.
The ECB is reported to set to hike rates by 75 basis points on Thursday to try and rein in red-hot inflation.
Elsewhere, the offshore Chinese yuan dipped to an unprecedented 7.3650 per dollar amid weakness after Chinese leader Xi Jinping’s choice of leadership team at the twice-a-decade Communist Party Congress raised fears growth will be sacrificed for ideology-driven policies.
