By Shan on 17 Jan 2018 | Filed under Brent Oil, CADCHF, CADJPY, EURUSD, GBPCAD, GBPUSD, News, NZDUSD, Point of View, USDCAD, USDCHF, USDCNY, USDJPY | Comments
The dollar fell to a three-year low against its peers on Wednesday, losing its earlier bounce as the euro edged back after shaking off a setback to Chancellor Angela Merkel’s chances of forging a “grand coalition” in Germany.
The dollar index against a basket of six major currencies last stood little changed at 90.446 after hitting 90.113, its lowest since December 2014.
The dollar index momentarily recovered to as high as 90.826 on Tuesday after slipping steadily this month on investors’ expectations that major central banks would eventually windback stimulus to normalise monetary policy.
“The view held by many market participants is that monetary policies are headed for normalisation across the globe. The dollar is bound to stay weak when such views prevail,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo.
Point Of View:
Dollar remains weak as monetary policies across the globe headed for normalization.
Dollar may continue to weaken for first half of 2018 as global economy seem proficient.
Conversely, market remain cautious on euro as Italian election in March is concerned.
Commodity-link currencies pared gained as the commodity price tumbled. However, oil price remains relatively steady.
Today’s focus will be on CAD overnight rate at 9pm SGT. If BOC hike rate, CAD will rally and vice versa.