Dollar Hits Lowest Level in Over a Year


 The U.S. dollar on Friday, July 21,  hit its lowest level in more than a year against a basket of major rivals a day after the European Central Bank’s chief abstained from talking down the euro, while obstacles to U.S. President Donald Trump’s policy agenda also weighed.

ECB President Mario Draghi said on Thursday that financing conditions remained broadly supportive, and noted that the euro’s appreciation had “received some attention.” However, he did not cite that strength as a problem nor did he directly try to talk the currency down.

Draghi’s apparent lack of concern about the strengthening euro convinced traders that the central bank remained on track to potentially begin tapering its bond-buying stimulus later this year.

The dollar index touched 93.854 .DXY, its lowest level since June of last year, and was last down about 0.5 percent at 93.885. The euro touched $1.1682 EUR=, its highest level against the dollar in nearly two years, and was last up 0.4 percent on the day at $1.1674.

“The fact that Draghi didn’t necessarily argue too much against the strength of the euro … certainly gave the greenlight for individuals to want to own the currency again or actually add to their positions,” said Dean Popplewell, chief currency strategist at Oanda in Toronto.

The euro was last on track to gain 1.8 percent for the week, which would mark its second straight weekly rise against the dollar. The dollar index was set to fall 1.3 percent to mark its second straight weekly decline.

Against the yen, the dollar touched more than four-week low of 111.02 yen JPY=.

In addition to traders’ expectations that the ECB was staying the course toward tightening monetary policy, investigations into alleged Russian meddling in the U.S. election and possible collusion with Trump’s campaign were viewed as obstacles to the administration’s pro-growth agenda and negative for the dollar.

“Compounding the (weaker dollar) move is this latest news on the political front in the U.S. about the Russia investigation expanding to Trump’s business affairs,” said Alvise Marino, FX strategist at Credit Suisse in New York.

The dollar touched its lowest against the Swiss franc in more than a year at 0.9440 franc CHF=, Reuters reports.


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