Dollar Jumps, Gold Falls as Demand for Havens Ebbs: Markets Wrap
The dollar strengthened against all of its major peers on the prospect of a U.S. interest rate increase as soon as March. Weakness in the euro helped European stocks shrug off some disappointing corporate results. The Bloomberg Dollar Spot Index rose the most in almost two weeks after a member of the Federal Reserve indicated the first rate increase of Donald Trump’s presidency remains “on the table” this quarter. Europe’s main equities gauge rose even as bellwethers BP Plc and BNP Paribas SA reported earnings that missed estimates. Gold slipped from the highest since November.
Draghi Says Euro Is Irreversible as Le Pen Urges French Exit
Mario Draghi reaffirmed that the euro is irreversible in a defense of the single currency against populists who reject it. “L’euro e’ irrevocabile, the euro is irrevocable,” the European Central Bank president said at the European Parliament on Monday, using both his native Italian and English. “Questo e’ il trattato, this is the treaty.”
Euro set for biggest daily fall of 2017 vs. dollar
Beset by political worries, the euro was set for its biggest daily fall of 2017 on Tuesday as broad gains halted a four-week run lower in the U.S. dollar. In morning trade in Europe, the single currency shed 0.8 percent EUR=EBS to fall below $1.07, with investors again worried by Greece’s debt problems and signs that far-right candidate Marine Le Pen is gaining momentum before France’s presidential election. Both represent large risks to the euro project as a whole and the cost of hedging volatility in the single currency against the dollar around the time of the final French vote on May 7 EUR3MO= rose to its highest in over a week.
China Jan FX reserves fall below $3 trillion for first time in nearly 6 years
China’s foreign exchange reserves unexpectedly fell below the closely watched $3 trillion level in January for the first time in nearly six years, though tighter regulatory controls appeared to making some progress in slowing capital outflows. China has taken a raft of steps in recent months to make it harder to move money out of the country and to reassert a grip on its faltering currency, even as U.S. President Donald Trump steps up accusations that Beijing is keeping the yuan too cheap. Reserves fell $12.3 billion in January to $2.998 trillion, more than the $10.5 billion that economists polled by Reuters had expected.