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Home / Business / Dollar Index Clings to Monthly Profit as Traders Focus on Emerging Market Turbulence

Dollar Index Clings to Monthly Profit as Traders Focus on Emerging Market Turbulence



The Turkish lira has regained some lost ground and the Argentine peso stabilized one day after a course central to emerging markets and investors. Meanwhile, a closely watched dollar index held a modest monthly gain on the last day of August.

"There remains a feeling that everything is not good in these markets and the question now really is whether the currency crises can be contained in Ankara and Buenos Aires, or whether there is a spillover effect and the risk of infection increases again" David Cheetham, chief market analyst at XTB, said in a statement.

Read: How Argentina's Peso Leap Keeps Emerging Markets in the Spotlight

The Indian Rupee

USDINR, -0.0844%

slumped to an all-time low on Friday's Asian trade on Friday, while the Indonesian rupiah

USDIDR, -0.44%

reached a three-year low before rebounding.

The US currency has barely changed in comparison to its main competitors, leaving a closely watched index for a modest monthly return on track.

The dollar lost 1.2% against the Argentine peso

USDARS, -2.5361%

expressing a decline following the International Monetary Fund's statement, said CEO Christine Lagarde would meet Argentine officials early next week and "fully support the country" , The peso is down more than 19% against the dollar this week and has been above 51% since the beginning of the year.

The peso fell sharply on Wednesday after President Mauricio Macri called on the IMF to accelerate the $ 50 payout billiard bailout that is causing investors to flee. The losses accelerated on Thursday, causing the Argentine central bank to increase its emergency rates and raise its benchmark by 15 percentage points to 60%.

See: Argentina raises interest rate to 60% on failed efforts to lift the peso

Against the Turkish currency, the dollar traded at 6.197 lira

USDTRY, -0.7196%

of 6,653 lira late Thursday, as the lira fell sharply following the resignation of the Central Bank Deputy Governor.

The bounce was attributed to a government move Friday to increase taxes on foreign currency deposits with maturities of less than a year, while reducing the tax on longer-term lira deposits.

"The move clearly aims to make the US dollar relatively attractive in the short term, longer term lira positions, but although there are initial gains, this will probably not be enough to stem the overall decline," said Cheetham ,

Worries over the Turkish economy, criticism of President Recep Tayyip Erdogan at the country's central bank, and a clash between Turkey and the US over Ankara's detention of US pastor Andrew Brunson have put pressure on the lira, according to FactSet fell by about 42% against the dollar by 2018. 19659002] The ICE US Dollar Index

DXY, + 0.42%

which tracks the US currency against six major competitors, traded at 94.860, up slightly from 94.739 late Thursday and on track for a 0.4% monthly increase. A stronger dollar and the Federal Reserve's slow but steady approach to tightening monetary policy were responsible for exacerbating pressure on some emerging market currencies.

The euro

EURUSD, -0.6084%

moved to $ 1.1637 against $ 1.1669 late Thursday, while the dollar slipped to ¥ 110.87 against the Japanese yen

USDJPY, -0.01%

of ¥ 111.94

Traders are also watching talks between US and Canada officials as they continue talks on a revised North American Free Trade Agreement before a White House submission deadline.

The US dollar rose 0.4% against the Canadian equivalent

USDCAD, + 0.6624%

at $ 1,33043

Earlier, the euro was little moved by a slowdown in inflation in the eurozone and a steady unemployment rate. Eurostat recorded a temporary increase in inflation of 2% over the previous year in the 19-nation region in August, compared to 2.1% in July. The unemployment rate in July was unchanged at 8.2%.

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