The dollar weakened against its peers as it was weighed down by another selloff in European government bond and stock markets with thin volume traded as no significant data was scheduled to be released out of the US. The US dollar index was trading near its 2 month low set last week of 93.96.
The euro strengthened against the dollar with the pair gaining roughly 1% reaching a session high of 1.1279. The euro was supported by the selloff in bond and stock markets which worked against the greenback’s strength. German 10-year bond yields surged having come in line with their US equivalent. German bond yields serve as indicators for European financial markets as higher yields support the euro higher against the greenback. The European Central Bank widened emergency funding for Greek banks by 1.1 billion to 80 billion euros after some progress was being made with regards to Greece’s debt issue.
The pound strengthened against the dollar trading at close to 5 month highs of 1.5711. The Office for National Statistics reported that UK industrial output increased by 0.5% in March marking its highest increase in 8 months beating expectations of remaining flat following an increase of 0.1% in February. Manufacturing production in the UK increased by 0.4%, which was just ahead of expectations for a 0.3% increase.
The yen held its ground against the dollar with the pair trading in its usual tight range today within less than 1 big figure. The pair reached a session high of 120.27. The pair’s wider range of 118 to 121 will most likely remain intact until the Federal Reserve raises its key interest rate or the Bank of Japan extends its stimulus program.
The Australian, New Zealand and Canadian dollars strengthened against the greenback. The Aussie dollar was up over 1% and the kiwi dollar up around 0.5%. The Australian Bureau of Statistics released data which revealed that home loans rose by 1.6% in March beating forecasts for a 1.0% increase. The kiwi dollar came off 8 week lows as the dollar weakened and the market anticipated the results of the Reserve Bank of New Zealand’s financial stability report set for release tomorrow. The loonie gained roughly 1% against the greenback.
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