The US dollar bought 119.79 Japanese yen, higher than 118.62 yen of the previous session.
But the greenback was up about 0.5 percent against the euro in late afternoon trade, as the euro fell to $1.1518 from $1.1606 around the same time Monday. But investors remain wary of the dollar’s short-term…
The dollar weakened because experts believe the likelihood is diminishing of an interest rate rise by the US Federal Reserve next month on the back of the global volatility sparked by fears over the Chinese slowdown. He noted that the euro in particular has become a favorite in acting like a safe haven when markets sell off and investors exit risk assets, “but its capacity to stay that way remains in question”, Henderson said. It is imperative to state that the dollar has come under pressure ever since the People’s Bank of China devalued its currency early last week sparking fears that the economy might be slowing at a faster rate than earlier expected.
US stocks rose as the Stoxx Europe 600 Index advanced 4.4%. The dollar index, which measures the greenback against six major peers, was down 1.71 percent at 93.386 in late trading on Monday, Xinhua reported.
“The source of the current crisis – uncertainty regarding Chinese policy – is still very much there”, said Chris Turner, head of currency strategy at ING Groep in London. “Defensive positions are still the way to go”.
Currencies in developing nations and those reliant on exporting commodities to China also rallied.
The value of the Australian and Canadian dollars has plunged in recent months, which would make it more expensive for Irish emigrants in those countries to holiday at home. South Africa’s rand and Mexico’s peso rebounded from records, while Russia’s ruble surged 3.1%.
Before the Fed minutes, the dollar was up about 8.8% against the euro on the year, according to FactSet data. The calculation is based on the assumption that the effective fed funds rate will average 0.375 per cent after the first increase.
Crude oil futures continued to fall on concerns about the global supply glut and a slowdown in demand should China move into a recession and drag the rest of the world down with it.
-With assistance from Netty Ismail in Singapore and Kevin Buckland in Tokyo.