Dollar Edges Higher Buoyed by Euro Weakness


The United States of America dollar jumped on Thursday, August 17, driven by weakness in the euro after the European Central Bank’s July policy meeting minutes.

However  the U.S currency was volatile as rumours swirled about the possible resignation of Gary Cohn, director of the U.S. National Economic Council.

Following rumours of Cohn’s departure, the White House released a statement saying he “intends to remain in his position.”

That helped calm markets as Cohn, along with Treasury Secretary Steve Mnuchin, is seen as pivotal to U.S. President Donald Trump’s economic agenda of tax cuts and infrastructure spending.

Still, analysts said, the dollar was in an unenviable position, with inflammatory news headlines from the White House weighing on its already weak position.

“We had yesterday’s Fed minutes that certainly didn’t do the dollar any favour,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

“We have to look at it in that context, where the dollar’s already on a somewhat shaky footing,” Esiner said.

The currency whipsawed for most of the day as news about Cohn and an attack in Barcelona that left at least 13 dead sent traders to safe-haven currencies like the Japanese yen and Swiss franc.

The dollar fell 0.55 percent against the yen to 109.60 yen and 0.4 percent against the Swiss franc. It hit session lows against both in the aftermath of the Barcelona attack.

The dollar index edged up to 93.628.

The index’s largest component is the euro, which sank to a three-week low after the ECB’s minutes showed officials warning about a possible market overshoot for the currency. The euro has risen close to 12 percent against the dollar this year.

The minutes, released at 7:30 a.m. EDT (1130 GMT), spurred an almost 1 percent fall in the single currency against the dollar, along with losses against the Swiss franc, yen and sterling.

The euro was last down 0.25 percent against the dollar at $1.1736.


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