Dollar hits 14 month low as euro climbs
The US dollar hit a 14-month low against a number of other currencies on Tuesday following a mixed bag of policymaker comments. Meanwhile, the pound rose slightly on early European sessions and the Australian dollar continued its climb.
Pound Sterling - UK markets
Sterling's rally from Monday's low at USD1.624 has been capped at 1.644 on early European session. The pound has retreated back below 1.640 against the US dollar to reach day-low levels at 1.63.
US Dollar - US Markets
The dollar extended broad losses hitting a 14 month low against other currencies this morning but options-related buying kept it from reaching 1.50 against the euro and 90 against the yen.
Strength in global stocks, fuelled by Apple Inc's forecast-beating third-quarter earnings overnight, also whet traders' appetite to sell US dollars for higher-yielding currencies and assets more closely correlated with economic recovery.
The dollar has been under sustained pressure this year due to expectations for low US interest rates and questions about its status as the world's reserve currency.
Euro - European Markets
The euro's bounce from a 1.482 low against the US dollar on Monday has rallied through its year-to-date high at 1.496 to reach a new high at 1.499 as traders reported talk of options barriers at and around that level, with expiries in Tokyo and New York trading time.
While most elements suggest a break above the psychological 1.500 level is imminent, analysts urge caution as yesterday's ‘hanging man' candle shows signs of instability at current levels.
Other Currencies - Highlights
The Australian dollar rose against the US dollar to its highest level since August 5, 2008 touching 0.930 as Reserve Bank of Australia Assistant Governor Philip Lowe said it is "appropriate" to remove stimulus as Australia's economy progresses. The Aussie has risen more than 30% against the US dollar so far this year.
The greenback fell 0.2 percent to 90.39 yen after Japanese Finance Minister Hirohisa Fujii repeated his reluctance to intervene in the foreign-exchange markets to halt the currency's gains.
Federal Reserve Chairman Ben Bernanke called on Monday for action on global imbalances, saying China and other Asian nations were looking more seriously at rebalancing than in the past but other issues could be addressed through greater foreign exchange flexibility.