Dollar climbs to break 4-session losing streak, but Syria worries stick

The dollar advanced Thursday in New York, posting its first gain in five sessions as traders parsed the risk of a military attack in Syria against recent minutes that underscored the Federal Reserves intention to slow too-hot economic growth.

At least part of the advance for the U.S. currency was driven by a decline in the euro, which weakened against its rival following disappointing industrial production data for the eurozone.

What are currencies doing?

The ICE U.S. dollar index
DXY, +0.01%
, which measures the buck against six rivals, was up 0.3% to 89.76, breaking a four-session skid. The broader WSJ U.S. Dollar Index
BUXX, -0.02%
was up 0.2% at 83.81.

The euro
EURUSD, +0.0243%
fell to $1.2328, down from $1.2369 late Wednesday in New York.

Britains pound
GBPUSD, +0.0492%
, meanwhile, edged higher to $1.4226 compared with $1.4178 on Wednesday, touching its highest level since early February.

The dollar rose against the Japanese yen
USDJPY, +0.03%
buying 楼107.23 compared with 楼106.79 on Wednesday, reaching its highest level in four sessions.

The buck jumped versus the Swedish krona
USDSEK, +0.1475%
, also a component of the ICE gauge, after Swedish inflation numbers underperformed expectations. One dollar last bought 8.4101 krona, up from 8.3259 late Wednesday in New York, rallying 1%.

Elsewhere, the Hong Kong dollar
USDHKD, +0.0102%
faced the first foreign exchange intervention by the Hong Kong Monetary Authority since 2015 to stave off further weakening of the Asian currency versus its U.S. rival, to which it is pegged. One buck last bought 7.8500 Hong Kong dollars, unchanged from Wednesdays level.

Russias ruble
USDRUB, -0.1532%
, which has been under pressure amid increasing fears about geopolitical tensions with the West that has whacked its markets, extended a recent recovery. One dollar last fetched 62.0130 rubles, compared with 62.450 late Wednesday in New York. The Russian currency had been dented following new U.S. sanctions against Moscow, which has offset benefits from a surge in crude oil to roughly three-year highs that would usually bolster the unit. However, its moves have moderated in recent action after it touched its lowest levels since 2016.

Read: Why the Russian rubles 10% drop versus the dollar might not be enough

Check out: President warns Russia to get readyhints at U.S. missile strikes on Syria

What is driving the markets?

The U.S. dollar edged higher Thursday in its first positive run in five session, as the modest haven asset-buying that had dominated recent trading days abated. Haven assets attract investors during times of turmoil and uncertainty thanks to their high liquidity.

Still, themes remained broadly similar to earlier in the week, when the buck had been lower, and traders waited for any developments in the escalating conflict over Syria. President Donald Trump on Wednesday signaled a missile attack on Syria wasnt far off, as a response to a suspected government-sanctioned chemical-weapons attack that killed civilians outside Damascus over the weekend. Russia has warned the U.S. not to launch an attack. Samples from Syria tested positive for chlorine gas, a nerve agent, a U.S. official told NBC News.

In trade news, Trump and trade representative Robert Lighthizer said renegotiations of the North American Free Trade Agreement were making progress. However, Lighthizer canceled his trip to Peru for the Summit of the Americas, which was initially thought to be the arena where a deal could be reached.

Also read: Heres what traders forget as headlines suggest imminent Nafta deal

Also on trade, Trump reportedly instructed Lighthizer and new National Economic Council Director Larry Kudlow to look at re-entering negotiations for the Trans Pacific Partnership (TPP).

U.K. Prime Minister Theresa May on Thursday summoned her cabinet to discuss whether to back military actions proposed by the U.S. May is prepared to take action without asking parliament first, the BBC reported. German Chancellor Angela Merkel said Germany wouldnt participate in military action against Syria.

The euro declined against most other currencies after industrial production data for the eurozone showed a fall for a third straight month in February. Further adding to euro weakness, Germanys economics ministry said its countrys economic upswing softened a little at the start of the year. Adding further to the weakness, the minutes from European Central Banks last meeting pointed at concerns over the strong euro given the trade-tension heavy environment.

What are analysts saying?

The currency market remains essentially on hold as it awaits both political and economic developments while the calendar itself is practically empty of any first-tier data, said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in a note.

The focus still remains on geopolitics as tension builds over the anticipated bombing of Syria. For now, however, there appears to be no threat of imminent action as [the] U.S. tries to corral a coalition of forces to respond to Syrias use of poison gas. After yesterdays twitter threat by President Trump, the newsflow has gone eerily quiet leaving markets at a tense standstill, he added.

Which data are ahead?

Jobless claims for the week ended April 7 came in at 233,000, more or less in line with the MarketWatch consensus forecast of 230,000.

The import-price index, meanwhile, was unchanged in March, compared with 0.4% increase before.

Check out: MarketWatchs Economic Calendar

Still coming up at 5 p.m. Eastern, after the markets close, Minneapolis Federal Reserve President Neel Kashkari is due to take part in a question-and-answer session with the Associated General Contractors of Minnesota.

Which other assets are in focus?

U.S. stocks traded higher Thursday, with both the Dow Jones Industrial Average
DJIA, +1.21%
and the S&P 500
SPX, +0.83%
in the green.

Treasury yields edged higher, with the 10-year government bond yield
TMUBMUSD10Y, -0.74%
rising 5 basis points to 2.832%.

Related Topics Currency Euro Yen Pound U.S. Dollar Federal Reserve

Quote References DXY +0.01 +0.01% BUXX -0.02 -0.02% EURUSD +0.0003 +0.0243% GBPUSD +0.0007 +0.0492% USDJPY +0.03 +0.03% USDSEK +0.0124 +0.1475% USDHKD +0.0008 +0.0102% USDRUB -0.0949 -0.1532% DJIA +293.60 +1.21% SPX +21.80 +0.83% TMUBMUSD10Y -0.02 -0.74% Show all references
MarketWatch Partner Center
Most Popular Stocks finish sharply higher as financials drive rally 21 lessons for how to get the most out of life, from a guy who retired at 50 Head of worlds largest asset management firm says this is key for stock-market investors James Comey is about to shock the president and his team What to do in your 50s to build wealth for your retirement

We Want to Hear from You

Join the conversation


Leave a Reply

Your email address will not be published. Required fields are marked *