The dollar scaled to its highest level in almost 14 years against a basket of currencies while US bond yields were set for the biggest fortnightly rise in 15 years on bets US inflation and interest rates are headed higher.
- Dollar Rises Again After Inflation Data, Yellen Comments – Wall Street Journal (subscription)
- Dollar at Fresh Highs as Treasury Yields Rise – Financial Times (subscription)
The dollar powered to its highest levels since 2003 against a basket of currencies with Donald Trump’s victory in the US presidential election helping to give the greenback its best fortnight against the yen in almost 30 years.
This week, the dollar strengthened to levels not seen in more than a decade, raising questions about the causes and sustainability of the increase, as well as the consequences for the global economy.
Derivatives traders were forced to stump up tens of billions of dollars the day after Britain’s vote for Brexit to cover volatile price movements, testing the foundations of the market’s post-financial crisis architecture.
The US dollar might have little bit more work to do until it chalks up a record winning streak, but the damage it has done to the euro in the meantime has meant the single currency is suffering its longest losing run since becoming an accounting currency in 1999 and has slipped below $1.06 for the first time in nearly a year.
The UK economy faces a period of significantly higher import prices on the back of a record slump in the pound, one of the deputy governors of the Bank of England has said, hinting policymakers were less willing to tolerate a sterling-induced inflation rise.
Mexico’s peso fell after an interest rate increase by the central bank fell short of expectations for stronger action to counter a slide in the currency sparked by Donald Trump’s US presidential election win.
China has weakened the renminbi’s trading band for a record 11th straight day, taking its currency to an eight-year low as expectations of US interest rate rises buoyed the dollar against the region’s currencies.
The US president-elect has talked tough on China, but he could be good news for China’s economy and its currency.
For the second time in two weeks the shockwaves rippling through global markets after the US election have provoked Asian central banks to step in to calm their currencies – mindful of concerns the region might see a sequel to 2013’s so-called Taper Tantrum.
Malaysia’s ringgit is sitting weaker as its central bank said it was intervening in the currency market.
Donald Trump’s shock presidential election victory wrongfooted many investors and triggered a convulsion across financial markets – although not always in the way analysts expected.
For much of the past decade the derivatives industry has been caught in the gravitational pull of the Dodd-Frank act, the sweeping piece of legislation meant to contain the risk of another financial crisis.
Banks may be more likely to bid in post-default auctions if temporary capital relief is granted.
The European Securities and Markets Authority has proposed delaying the European Market Infrastructure Regulation (Emir) clearing obligation for smaller category three firms to June 2019.
The ECB’s new role as top policeman for the eurozone’s biggest banks risks being undermined by a staffing shortage, according to a first audit of the institution carried out by EU officials.
Michael Spencer – tycoon, Tory, oenophile – is making the biggest trade of his career.
Like the Christmas decorations that seem to spring up in shops earlier every year, the rush of “year-ahead investment themes” is already trickling out of the big banks, including Goldman Sachs, whose top trades are an annual staple.
The dollar stomped emerging market currencies down further and that’s not going to end anytime soon, analysts said.
The rand has fallen to its weakest level since the start of September, as the dollar’s longest rally in four years continues to batter emerging market currencies.
The Canadian dollar weakened against its US counterpart as strong US economic data and comments from Federal Reserve Chair Janet Yellen solidified expectations of a US interest rate hike next month.
Taiwan’s stocks and currency fell tracking weaker regional markets, as a rise in US bond yields lifted the dollar.