Dollar surges on risk aversion, Fed's rate path

Markets 8/10/2018, 8:44 AM
Dollar surges on risk aversion, Fed's rate path

Britain's Brexit woes, euro area banks' exposure to the ailing Turkish economy and United States sanctions in the pipeline against Russia fueled the dollar's jump on Friday compared to most main peers, though it slipped only marginally compared to the yen after Japan's upbeat economic growth data. Continued rounds of import tariffs imposed by the government in Washington against major partners have had investors flocking to the safety of the greenback.

Underpinning its rise is also the strong expansion of the world's largest economy and the divergence of interest rates, as the US Federal Reserve may even need to accelerate the tightening, in which it has left other central banks behind. The shift has particularly hit emerging markets.

The euro tumbled 0.59% at 8:42 am CET, buying $1.14594, after dipping to $1.14321, the weakest level since July 14 of last year. The pound declined 0.31% to $1.27841, compared to the session low of $1.27738, last seen on June 27, 2017. The dollar was 7.41% higher at 5.9543 Turkish liras, following a spike to a record high at 6.2534. The exchange rate against the Russian ruble was 0.83% up at 66.903. The session high, 67.172, was unseen since August 22, 2016.

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