The United States of America dollar, on Wednesday, December 27, slumped against a basket of currencies and fell against the euro on in thin holiday trading.
The U.S. dollar eased 0.1 percent against a basket of major currencies to 93.193. .DXYThe U.S. dollar was also down 0.1 percent versus the euro at $1.187 EUR=EBS
Meanwhile a rally in commodity prices helped push the Canadian and Australian dollars to their highest levels in two months.
Traders said there was little news to support the euro’s rise, but some investors have positioned for a possible strengthening in the single currency into the new year following a stellar 2017 in which the euro had its best year against the greenback since 2003.
Sterling markets were quiet, with the pound up 0.1 percent at $1.338. GBP=D3
That helped support demand for the currencies of commodity exporting countries, with the Canadian dollar touching C$1.2659 CAD=D3, its highest level since October.
Similarly, the Australian dollar AUD=D3 rose 0.4 percent to $0.7762, reaching its highest level in two months.
“There are very few events to drive anything today,” said Christin Tuxen, an FX strategist at Danske Bank, adding that the passage of the U.S. government’s landmark tax reform last week was not helping the dollar. “For most people it’s not going to be this dollar-supportive event.”
Tuxen said that euro U.S. dollar trading in December had been driven by volatility in the Euro/dollar cross-currency basis swaps, which widened significantly earlier this month as demand for dollars jumped.
Monetary policy convergence could weigh on the dollar next year, now that central banks other than the U.S. Federal Reserve have either begun moving away from monetary stimulus, or started to raise interest rates, said Peter Chia, FX strategist for United Overseas Bank in Singapore.
Against this backdrop, Japanese policymakers may at least start dropping more hints about an eventual tightening of the Bank of Japan’s monetary policy, Chia said, adding that the dollar could slip to 108 yen by the end of March.
The dollar held steady against the yen at 113.19 yen. JPY=
Bitcoin rose 2.28 percent to about $16,124 BTC=BTSP on the Luxembourg-based Bitstamp exchange, putting it about 14 percent up this week, after last week suffering its biggest weekly drop since 2013.
