US dollar strengthens as traders see resilient US economy
Olga Cotaga, Reuters
February 9, 2020
LONDON (Reuters) - A stronger U.S. dollar dragged the euro down to its lowest level in months as investors expected the U.S. economy to remain resilient to the spread of the coronavirus across the world, with payroll data from last week reinforcing traders’ optimism.
Market participants were more positive about riskier currencies amid hints that the spread of the coronavirus could be slowing down and as some big businesses resumed work in China after the Lunar New Year break.
The Australian dollar rose 0.3% to 0.6694 per U.S. dollar, pulling away from a decade-low touched earlier in the session. It has lost 4.5% this year. The Chinese yuan also rose 0.3% to 6.9860 per U.S. dollar.
The U.S. dollar, however, was stronger against other major currencies.
It pushed the euro to match a four-month low of $1.0942 and dragged the pound down to a 2-1/2-month low of $1.2873, before sterling recovered and traded last at $1.2911, up 0.2% on the day.
Versus the euro, the pound was 0.2% higher at 84.84 pence.
“The relative attractiveness of the U.S. dollar has been boosted in the near-term by building concerns over the outlook for growth outside of the U.S., the rising probability of President (Donald) Trump winning a second term and further evidence of the ongoing resilience of the U..S economy,” said Lee Hardman, currency analyst at MUFG.
“However, the Fed’s reluctance to tighten policy should help to dampen upside potential for U.S. yields and the U.S. dollar,” Hardman said.
According to analysts...