Hot Topic:
- The dollar hit a nearly two-year low against the euro, after the European Central Bank signaled it could start discussing in the fall a plan to pare back its bond purchases.
- The dollar was also under pressure because of concerns the Russian investigation could slow down tax reform and other pro-growth policies of the Trump administration.
- One strategist said there's no longer any resistance against dollar weakening.
The dollar is crumpling under pressure, and there doesn't appear to be much to stop it.
European Central Bank President Mario Draghi was the latest catalyst, sending the euro higher with comments that the ECB would discuss when to start paring back its bond purchases in the fall.
While some viewed the central bank president as a bit vague, his words still drove the euro to a near two-year high against the dollar.
"I think this [move] is three-quarters to maybe a bit more Draghi and the market assuming, despite the exact words Draghi used, that there still is a tapering decision coming in September," said Marc Chandler, head of fixed income strategy at Brown Brothers Harriman.
The euro traded through $1.1615, last year's high, to about $1.163, a gain of 1.1 percent on the day. Chandler said there was strong options buying, pointing to market expectations of a much stronger euro at $1.20. The dollar index fell to an 11-month low and was at 94.27 in late trading, a decline of 1.5 percent in the last week.
The greenback is now down 10 percent this year against the euro.
There has been concern that the Russian probe would be a distraction from efforts to push through President Donald Trump's pro-growth policies, such as tax reform.
"There's no resistance to a lower dollar," Chandler said. Just last week, Chandler and others had believed the dollar could finally be getting ready to move higher, as sovereign yields rose on the view that global central banks were getting ready to tighten.
Reference: CNBC
Read More: http://www.cnbc.com/2017/07/
Thai
Eng