Most of the weakness in the dollar could be attributed to the removal of stimulus by the central banks
Dubai: Amid calmness in markets elsewhere, the dollar index gave a jolt on the last day of trading by falling to its lowest level in three months, and analysts say the gauge may rebound from here.
“The only real salient observation in the major currencies is that the USD is ending the month and year on a sour note and bumping up into pivotal areas in key pairs — most notably the key 1.2 area in EUR/USD,” John J Hardy, head of forex strategy at Saxo Bank, said in a note.
“The first few trading days of the New Year will be critical for judging the quality of this dollar move as liquidity returns with the roll of the calendar year next week,” Hardy said.
On Friday, the dollar index fell 0.41 per cent to be at 92.30, after hitting a low of 92.08, the level last seen in September.
“The dollar fall on Friday happened in thin market conditions. And the technicals are indicating that dollar is oversold. We see a 3-4 per cent upside in the dollar. Euro will drop to 1.17 levels again. Yen can go to 114/115. Indian rupee will be range-bound between 64 and 65,” said a currency strategist based in Dubai, who did not wish to be named.
Euro/USD pair closed at 1.19985, while one dollar fetched Rs63.8725 on Friday.
Friday’s fall meant a 9.8 per cent decline in the dollar index from its early January high of 103, the highest level in 14 years.
Most of the weakness in the dollar could be attributed to the removal of stimulus from the central banks, even as the US Federal Reserve prepares to hike the interest rates.
A weaker dollar supported prices of all commodities like gold, oil and other metals. Gold prices hit their highest level in a month on Friday, while oil prices witnessed their highest level since 2015.
Brent crude rose 1 per cent to end at $66.87 per barrel, while gold prices in international spot market closed 0.60 per cent higher at $1,302.80 per ounce.
In other markets, the Dow Jones Industrial Average closed in the negative zone after a strong year. The index closed 0.48 per cent lower at 24,719.22, after gaining more than a fourth in 2017. The S&P 500 index also ended lower at 2,673.61. The MSCI Emerging market index closed 0.42 per cent higher at 1,158.45. The Malaysian KLCI closed 1 per cent higher, while the South Korean KOSPI index closed 1.26 per cent stronger.
Smaller cryptos gain momentum
Traders are now focusing on smaller cryptocurrencies like Ripple and Cardano even as Bitcoin prices stabilised in the range of $12,500-$13,500 in the past week.
Market capitalisation of Ripple was placed at second position on Sunday at $84 billion, much ahead of ethereum, which was at $69 billion. Among small coins, Cardano has jumped in terms of market cap, and is ahead of Litecoin. Bitcoin’s market capitalisation was at $217 billion on Sunday.
Bitcoin prices shed 16 per cent last week after South Korea hinted at potential shutdown of at least some exchanges to counter speculation.
“Throughout this year, we have heard many similar messages [followed by actions] from China and yet Bitcoin made a high of $19,338,” said Naeem Aslam, chief market analyst with Think Markets.
Bitcoin prices gained as much as $1,900 per cent in 2017, eclipsing gains from other asset classes.
نشكركم زوار العرب اليوم على تصفح موقعنا وفى حالة كان لديك اى استفسار بخصوص هذا الخبر Dollar at 3-month low gives year-end surprise, may rebound برجاء ابلاغنا اوترك تعليف فى الأسفل
المصدر : gulfnews