FOREX-Dollar index wallows at 3-yr lows, euro buoyed by ECB taper hopes

By Kitco News / January 14, 2018 / www.kitco.com / Article Link

* Hopes of further ECB tapering bolster euro

* Dollar skids to lowest since September against yen


By Lisa Twaronite

TOKYO, Jan 15 (Reuters) - The dollar wallowed at three-year lows against a basket of currencies on Monday, while the euro took a breather after soaring on hopes that European Central Bank policymakers were gearing up to further trim their monetary stimulus.

The dollar index, which tracks the greenback against a basket of currencies, edged down 0.1 percent to 90.931 after falling as far as 90.857 earlier in the session, its lowest since January, 2015.

The euro was down 0.1 percent at $1.2191 but remained in sight of its peak of $1.2218 marked on Friday, its highest since December, 2014, leaving strategists to ponder where its next top might be.

"I think the strength of the euro is overdone," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

"The strength of the euro itself will delay the ECB's normalization. The ECB is conducting verbal tightening, so they don't need to move on interest rates."

Against the yen, the dollar slipped to its lowest levels since mid-September, as comments from Japan's central bank governor underscored Japan's economic recovery.

While Bank of Japan Governor Haruhiko Kuroda reiterated the central bank's resolve to maintain its massive stimulus programme until 2 percent inflation is achieved stably, he also said the country's economy was expected to continue moderately expanding. The dollar was 0.1-percent lower at 110.90 , after earlier falling as far as 110.82 soon after Kuroda's remarks.

Sterling was steady on the day at $1.3734 .

On Friday, the British currency jumped to its highest levels against the dollar since the Brexit vote in June, 2016, after a report that the Netherlands and Spain were open to a deal for Britain to remain as close as possible to the European Union. The pound shrugged off a denial from officials from the Spanish and Dutch finance ministries, who said there was no new agreement between the countries on how Britain should leave the EU. (Reporting by Lisa Twaronite; Editing by Joseph Radford)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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