Dollar rises to four-week high as sterling, U.S. stocks fall
The safe-haven dollar climbed to a four-week peak on Tuesday, led by gains versus sterling on renewed worries about Brexit and as risk appetite waned with a sell-off on Wall Street.
Analysts said the U.S. currency’s gains are likely to be unsustainable.
Sterling fell to a four-week low against the dollar and was last down more 1.2% at $1.2987 GBP=D3.
Britain had gone into Tuesday’s fresh round of Brexit trade talks warning it was ramping up no-deal preparations. A sense of crisis took hold as the Financial Times reported the head of Britain’s legal department had quit over suggestions Boris Johnson wanted to override parts of the existing divorce deal.
In afternoon trading, the dollar index rose 0.4% to 93.445, after advancing to a four-week high of 93.483.
The dollar struggled against the Japanese yen, falling 0.3% to 106.04 JPY=EBS, weighed down by the meltdown in U.S. stocks.
The euro fell to a two-week low versus the dollar, and was last down 0.3% at $1.1779 EUR=EBS ahead of the European Central Bank's post-summer meeting later in the week.
Most analysts expect no change in the central bank’s policy but are looking to its message on inflation. Markets also want to know if the bank is concerned about the euro’s strength following its recent rise to $1.20.
Reference: CNBC
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