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Tuesday, 30 October 2018 01:19 - - {{hitsCtrl.values.hits}}
TOKYO (Reuters): The dollar held firm against a basket of its key rivals on Monday, not far off a 10-week peak hit after data showed US economic growth slowed less than expected and as global risk sentiment remained fragile.
The US currency has found support recently on safe-haven buying as investor demand for riskier assets waned on steep declines in world equity markets on concerns over corporate earnings, geopolitical uncertainty and global growth.
On Monday, the dollar index, which measures the greenback’s performance against a basket of six major currencies, edged 0.15% higher to 96.499. The index has gained 1.4% this month.
On Friday, it rose as high as 96.860, its best level since Aug. 15, after data showed the US economy slowed less than expected in the third quarter, before turning down to end 0.3% lower on the day.
Trade tensions between the United States and China, and a steady pace of rate increases by the Federal Reserve, have boosted the dollar, which serves as a safe haven in times of turmoil and economic stress.
A relatively strong US economy has also underpinned the dollar, although some weak corporate earnings have started to stoke doubts about the growth outlook especially in an environment of rising borrowing costs.
The euro dipped 0.1% to $1.1390 even as German Chancellor Angela Merkel’s junior coalition partners gave her conservatives until next year to deliver more policy results.
The euro has lost 1.8% this month on concerns over Italy’s free-spending budget that would breach European Union fiscal rules. Markets have been jittery and yields on Italy’s bonds have spiked since September as the EU disapproved of Rome’s budget plans.
Against the yen, the dollar held steady at 111.92 yen. The dollar has weakened 2.3% against the yen, which also acts as a safe haven in times of geopolitical turmoil, from a more than 11-month high of 114.55 yen reached on Oct. 4.
