The US dollar remained near multi-month lows on Monday as concerns over US debt and Treasury bond buybacks weighed on sentiment, while the Australian dollar and New Zealand dollar hovered near three-month highs.
Traders were also awaiting details of potential US sanctions on Iran and a speech from Federal Reserve Chair Kevin Warsh later this week.
The Canadian dollar slipped 0.3% to C$1.3807 per US dollar after trade talks between Ottawa and Washington collapsed, with the US imposing 50% tariffs on Canadian goods and Canada retaliating. The Australian dollar stood at US$0.7166 while the New Zealand dollar was at US$0.5972, both just below three-month highs.
The euro held above US$1.16 at US$1.1680 while the yen remained on the stronger side of 159 per US dollar. Sterling was steady at US$1.3650 and the yuan hovered near a three-and-a-half-year high at 6.7232 per US dollar.
Gold and bitcoin’s gains have also highlighted renewed concerns over the dollar, with bitcoin rising nearly 23% against the currency last week and gold climbing 5%.
Goldman Sachs analysts said the Treasury’s move to support longer-duration bond prices leaves the dollar as the remaining outlet to encourage foreign inflows needed to finance the US current account.
Markets will now focus on Washington’s Iran sanctions announcement and Warsh’s Jackson Hole speech, with investors seeking clues on US interest rates, Treasury policy and the outlook for bond yields.
