- Dollar index up 0.2 pct but still off Dec. 14 high
- US government shutdown, Fed rate concerns weigh
The dollar gained against the euro on Wednesday as U.S. stocks came off 20-month lows, though uncertainty relating to the U.S. government shutdown and Federal Reserve monetary policy remained a headwind for the greenback.
Wall Street opened higher after a few punishing sessions that left the S&P 500 on the brink of bear market territory on worries over slowing growth and the drama in the White House.
"There is a modest sense of temporary stability returning to equity markets," Nick Bennenbroek, a currency strategist at Wells Fargo in New York said in a report.
"That said, trading conditions remain light and investors remain somewhat cautious, watching closely for more U.S. political headlines," Bennenbroek said.
On Tuesday, U.S. President Donald Trump said the partial shutdown of the federal government was going to last until his demand for funds to build a wall on the U.S.-Mexico border is met.
Trump also expressed confidence in Treasury Secretary Steven Mnuchin, but repeated his criticism that the Fed has raised interest rates too quickly. The dollar has been hit in recent weeks by investor fears that rate hikes will hurt the U.S. economy as international growth sputters.
“There's an endless laundry list of concern Trump berating the Fed, Trade Wars, China slowing growth, Brexit casualties, EU slowdown. But when you factor in a downturn in the U.S. economy, this is when things get ugly,” Stephen Innes, head of trading APAC at Oanda in Singapore said in a note.
The dollar index against a basket of six major currencies .DXY gained 0.20 percent to 96.747. It was down from a 1-1/2-year high of 97.711 on Dec. 14.
Liquidity was thin after major markets were closed on Tuesday for the Christmas holiday. Markets in Britain, Germany and France remained closed on Wednesday.
======================================================== Currency bid prices at 9:26AM (1426 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1389 $1.1361 +0.25% -5.06% +1.1421 +1.1351 Dollar/Yen JPY= 110.5600 110.2700 +0.26% -1.87% +110.7000 +110.1500 Euro/Yen EURJPY= 125.96 125.67 +0.23% -6.82% +126.2200 +125.6600 Dollar/Swiss CHF= 0.9913 0.9836 +0.78% +1.74% +0.9919 +0.9853 Sterling/Dollar GBP= 1.2680 1.2684 -0.03% -6.16% +1.2719 +1.2669 Dollar/Canadian CAD= 1.3609 1.3588 +0.15% +8.21% +1.3617 +1.3580 Australian/Doll AUD= 0.7059 0.7037 +0.31% -9.51% +0.7060 +0.7033 arEuro/Swiss EURCHF= 1.1292 1.1257 +0.31% -3.38% +1.1295 +1.1246 Euro/Sterling EURGBP= 0.8981 0.8980 +0.01% +1.10% +0.9000 +0.8968 NZ NZD= 0.6729 0.6724 +0.07% -5.02% +0.6740 +0.6721 Dollar/DollarDollar/Norway NOK= 8.8070 8.7699 +0.42% +7.30% +8.8246 +8.7372 Euro/Norway EURNOK= 10.0310 9.9771 +0.54% +1.85% +10.0476 +9.9669 Dollar/Sweden SEK= 9.0681 9.0533 +0.13% +10.56% +9.0804 +9.0404 Euro/Sweden EURSEK= 10.3290 10.3151 +0.13% +4.98% +10.3431 +10.3108
