Dollar stuck near six weeks low versus yen

08/06/2017 02:13 AST

The dollar wallowed near a six-week low against the safe-haven yen on Wednesday, with traders cautious ahead of Britain’s general election, a European Central Bank policy decision and testimony by former FBI Director James Comey.

The greenback threaded water at 109.490 yen, not far from 109.225, its lowest since April 21 plumbed overnight.

The dollar has lost 0.9 per cent against the yen this week, also pressured by a sharp drop in US Treasury yields to seven-month lows as investors sought the safety of government debt. The US currency was seen coming under more pressure as previously bullish equities also began declining.

Wall Street shares pulled away from recent record highs and fell overnight as demand for risky assets waned ahead of Thursday’s events.

“The dollar has felt the tug of lower US yields for a while now, but buoyant stocks had helped neutralise some of that pressure,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“But it lost even that support, and the dollar’s fall gathered momentum.” Comey, who will testify on Thursday, was investigating whether Donald Trump’s presidential campaign and Russia colluded to sway the 2016 US election when he was fired by Trump in May.

Investors are worried his testimony could dampen already flagging momentum for Trump’s agenda of rolling back regulations and overhauling the tax code.

The dollar index against a basket of major currencies was a shade lower at 96.624 following a slip to 96.515, its lowest since November 9.

Oman Daily Observer