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Home / Business / Dollar weakened at its lowest level in two months after Biden won US presidency According to Reuters

Dollar weakened at its lowest level in two months after Biden won US presidency According to Reuters



© Reuters. FILE PHOTO: US dollars are calculated by a bank employee at a bank in Westminster

By Tom Westbrook

SYDNEY (Reuters) – The dollar hit a 10-week low on Monday as investors heralded Joe Biden’s US Presidential election by buying commercial currencies in anticipation that the House Calmer White could boost world trade and monetary policy would remain easy.

The hit a 28-month high, New Zealand dollars reached 1

9-month highs and Australian dollars hit a seven-week high when falling to its lowest level since early September (). Korea won hit a 21-month high of 1,115.33 per dollar. reached its highest level in more than two months while the euro () rose 0.1%, extending its gain almost 2% from the previous week to reach a two-month high of $ 1.1895.

Biden crossed the 270 electoral college votes needed to win on Saturday when he won in Pennsylvania. Republicans appear to remain in control of the Senate, although the final outcome may not be clear until Georgia’s voting in January.

CMC Markets chief strategist in Sydney, Michael McCarthy, said: “The results are ideal from a market point of view. “Neither side controls Congress, so both a trade war and higher taxes are largely off the agenda.”

The prospect of a more deadlock also means that expectations for a major US fiscal stimulus have been lowered, leading to a sharp drop in bond yields on predictions that the US Federal Reserve will borrow less and loosen. more quantitative.

The broad weak dollar had the yen a stronger gain against the US dollar and just below Friday’s eight-month peak of 103.18 yen per dollar, while lower US bond yields also made the Treasury less attractive to the with extraordinary buyers in Japan.

The yuan, particularly sensitive to the election results because of the perception that Biden will take a softer or more predictable stance towards China, has also been driven by strong Chinese trade data. on the weekend up at 6.5826 per dollar.

Westpac analyst Sean Callow said: “A weak dollar is probably going to have a bit of a way to run under Fed conditions and also ease trade tensions as something positive. with other currencies ”.

Bigger moves were tested on Monday as the currency markets largely reacted to Biden’s win on Friday and because Donald Trump, the first incumbent to lose reelection in 28 years, failed signs of concessions.

Commonwealth Bank of Australia (OTC) currency analyst Kim Mundy said: “We would warn that sharp volatility is not necessarily behind us, even though the election results have been won. determined ”.

The President, who spent months trying to undermine the election results with unproven allegations of fraud, on Saturday pledged to continue with a legal strategy he hopes to overturn. The cantonal fruit brought Biden the victory.

Traders are also wary as cases of coronavirus infections increase, with the global total numbering 50 million on Sunday as cases in the United States surpass 10 million – sparking worries about many. lockout service over.

Late Monday saw the arrival of Bank of England Governor Andrew Bailey and chief economist Andy Haldane at 10:35 GMT and 1400 GMT, where negative exchange rates were discussed. Dallas Fed President Robert Kaplan speaks at 22:00 GMT.

On Wednesday, the Reserve Bank of New Zealand met, expecting to keep interest rates but set the framework for going negative next year.

In emerging markets, the Turkish lira is devalued rose as much as 2% after the overthrow of the central bank’s chief and Turkish finance minister’s resignation over the weekend.

The lira fell 30% to a record low this year amid a coronavirus pandemic as investors worried about a decline in foreign reserves and double-digit inflation.




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