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Dollar Extends Weakness Against Peers

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Dollar Extends Weakness Against Peers

The U.S. dollar edged lower against most major currencies amid thin deals on Monday, extending its recent weakness.

The dollar eased amid expectations the U.S.-China trade will be signed sometime soon and on optimism about Chinese economy after the country’s central bank announced a measure that would reduce borrowing costs.

The dollar index, which measures the currency’s strength against six major currencies, declined to 96.61 by noon. Despite recovering to 96.77 in late afternoon trades, the index was still down in negative territory, trailing its previous close by 0.16%.

Against the Euro, the dollar weakened to $1.1197, declining 0.19% from Friday’s close of $1.1176.

Against Pound Sterling, the dollar eased to $1.3104 from $1.3080. The British currency gained in strength against most major counterparts amid easing fears over Brexit following recent remarks from European Commission chief Ursula Von der Leyen signaling extension of the transition period to strike a new trading deal with the European Union.

The new head of the EU said that the U.K. should reconsider the 11-month timeframe available for negotiating a trade deal with the EU after Brexit. He expressed concern about the issues that “need to be negotiated” and emphasized the necessity to extend the deadline for talks.

The Japanese Yen strengthened to 108.84 a dollar, gaining more than 0.5% from previous close of 109.45 yen a dollar.

The dollar was down 0.14% against the loonie at 1.3061 and down 0.2% against the Aussie at 0.6995.

Against Swiss franc, the dollar was down nearly 0.6%, with the dollar-franc pair at 0.9694. Data from the KOF Swiss Economic Institute showed that Switzerland’s economic outlook is set to brighten at the start of next year, yet remain subdued.

The KOF Economic Barometer rose to 96.4 from 92.6 in November, which was revised from 93. Economists had expected a score of 94.5.

The Swedish Krona was weak against the dollar at 9.3513, compared to 9.3392 a dollar on Friday evening.

In U.S. economic news, a report released by the National Association of Realtors said its pending home sales index jumped 1.2% to 108.5 in November after falling by a revised 1.3% in October. Economists had expected pending home sales to surge up by 1.1%.

Meanwhile, a report released by MNI Indicators said Chicago-area business activity continued to contract in the month of December. However, the pace of contraction slowed from the previous month.

The report said MNI’s Chicago business barometer climbed to 48.9 in December from 46.3 but it indicates a contraction in regional business activity. Economists had expected the barometer to rise to 48.0.

On the other hand, the report said the new orders index edged down to 49.1 in December, while the employment index fell to 47.4.

The material has been provided by InstaForex Company – www.instaforex.com