Investing.com – The dollar continued its decline on Tuesday, the yen and the euro firm as traders anticipate an erosion of the premium of interest rates on dollar assets.
During the night, the dollar fell to 106,79, its lowest level in 14 months against the yen, before edging back up to 107,02 at 10.20 am. The dollar index, which measures the greenback against a basket of currencies of developed markets, has also reached its lowest level in 95,468 before bouncing 95,488.
The euro, meanwhile, reached its highest level in three months, 1,1413$, before consolidating under 1,1400 dollar, thanks in part to a survey of investors in France is lower than expected. This follows a reading of also dark of the research institute Ifo business climate in Germany.
Caution remains the watchword for the next day of the answer given by Iran to the u.s. sanctions imposed on its supreme leader, the ayatollah Khamenei, saying that the chain of diplomatic communication had been “closed for ever”. Nevertheless, the sanctions largely symbolic, announced Monday, are not sufficient to trigger important entries in safe assets.
Traders have little incentive to take new positions before the vital summit of the G20 this weekend, where the american president Donald Trump and his chinese counterpart Xi Jinping are likely to meet. A telephone communication between the chief negotiators of the two parties late Monday has not revealed any detail, but has at least avoided an interruption of public communication.
The federal Reserve chairman, Jerome Powell, is expected to speak at 19: 00 later on Tuesday. Powell was again criticized Monday by Trump, declaring that
the Fed has acted as “a child’s stubborn” for not cutting interest rates at its meeting last week.
The pound continued its recent rise after lawmakers of the Conservative party planned to prevent Boris Johnson out of the United Kingdom of the European Union without an agreement on 31 October, if, as expected, Johnson won the race for the party leadership.
Moreover, the lira turkey has struggled to build on its strong gains from Monday. It was little changed at 5,8197 for a dollar.