“The dollar was expected to weaken with a Republican Party victory as it was surmised that Donald Trump would turn protectionist which would not be good for the economy. However, the dollar has been strengthening relentlessly since then; and while domestic fundamentals have played their part at times for specific countries, in general currencies have been weakening against the dollar,” Care Ratings said in a 21 November note.
“The follow-up action from the USA and possible reaction of other countries especially China could play a part in driving the direction of the dollar, as other countries too could impose tariffs on US goods affecting their exports. Further, the forthcoming OPEC meeting and the referendum in Italy could cause diversion from the dollar as other factors would come into play,” the report added.
India’s benchmark Sensex index was trading at 25,931.67 points, down 0.46% or 120.14 points from its previous close. So far this year, it has fallen 1.5%.
The benchmark 10-year government bond yield was trading at 6.316% compared to Wednesday’s close of 6.311%. Bond yields and prices move in opposite directions.
Elsewhere, Asian currencies slumped on broad dollar gains after stronger-than-expected US data and Federal Open Market Committee minutes reinforced speculation that the Fed will raise rates in December. The South Korean won was down 0.54%, Malaysian ringgit 0.45%, Indonesian rupiah 0.36%, Philippines peso 0.28%, Singapore dollar 0.27%, Taiwan dollar 0.21%, Japanese yen 0.18% and Thai baht 0.05%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 101.82, up 0.12% from its previous close of 101.7.
(Sourced from agencies, feature image courtesy:ibtimes.co.in)
