Currency – The Swiss franc fell to its lowest in nearly seven months against the euro on Monday because the Brexit trade deal remained in focus, while the dollar dipped after U.S. President Donald Trump signed a COVID-19 aid bill, averting a government shutdown.
The Swiss franc fell 0.3% to 1.08860 against the euro, its lowest since June 8. There have been no changes against the U.S. dollar at 88.835 cents at 0903 GMT.
“What we are seeing may be a continuation of the pricing out of hard Brexit risk,” said Ulrich Leuchtmann, head of FX research at Commerzbank in Frankfurt.
“I think lots of market participants saw Swissie as another to the euro, (which) would are harder stricken by a hard Brexit,” he said. Investors were likely to shut out of such positions within the following sessions, he added.
The euro was up 0.1% $1.22370, near the two 1/2-year high of $1.2273 touched this month.
In us, Trump signed into law a $2.3 trillion pandemic aid and spending package. Averting a partial centralized shutdown that will have started on Tuesday.
The dollar dipped 0.3% against a basket of currencies to 90.031, its lowest in a week.
The boost to risk appetite also hurt safe-haven government bonds, with 10-year U.S. Treasury yields up 2 basis points at 0.95%. There were no changes in Germany’s benchmark 10-year yield at -0.55%.
Meanwhile, Britain’s sterling added 0.1% against the U.S. dollar to $1.3551. Which is continuing to stay in sight of the $1.3625 mark it hit earlier this month for the primary time since May 2018.
It neared that level on Thursday when Britain and the EU announced the trade deal.
The pound was down 0.5% against the euro at 90.280 pence.
“Markets are likely to attend until next week though before buying (sterling) again. Petrified of massive bottlenecks at the English Channel because the new rules get,” Jeffrey Haley, senior analyst at OANDA told clients.
While the deal came as a relief to investors, the bare-bones nature of the pact leaves Britain much more detached from the EU, analysts say. They are suggesting any subsequent gains are going to be modest and also the discount that has dogged UK assets since 2016 won’t vanish soon.
Brussels has made no decision yet on whether to grant Britain access to the bloc’s financial market.
Mitsuo Imaizumi, the chief FX strategist at Daiwa Securities in Tokyo, expects the pound and euro to say no against the dollar. Which is reaching $1.30 and $1.15 respectively by the tip of the summer.
The Australian dollar, a trade-sensitive currency, inched up to 76.110 U.S. cents. Which is reaching toward the two 1/2-year high of 76.390 this month.
Yields on 10-year Southern European bonds – deemed riskier because of their lower credit ratings – dipped 2-3 basis points.
The yuan crept up after China’s financial organization lifted its official guidance level to the very best in 30 months. To as high as 6.5280 against the dollar within the onshore market, but was last unchanged at 6.5408.
It was last down 0.3% within the offshore market at 6.5311.
The yen rose slightly against the dollar, up 0.1% at 103.455. .
Policymakers at Japan’s central were divided on how far they must get in examining the yield curve control. With some calling for a comprehensive review of the framework. It is a summary of opinions voiced at the December rate review showed on Monday.
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