LONDON (SHARECAST) - The dollar came under broad pressure on Tuesday after rate hikes around the world and as trepidation set in ahead of the US mid-term election results and the Federal Reserve policy statement.
Tuesday’s rate hikes by the Australian and Indian central banks highlighted the fact that the Fed is now the only big central bank considering another round of easing.
The Australian dollar jumped against the greenback, to the highest level since 1982. The surprise move also sparked interest in other riskier currencies. The euro moved above $1.4000 against the dollar and continued to gather momentum well into late afternoon trading.
However sterling failed to benefit from Tuesday’s rally against the dollar, easing slightly against the US currency, as traders digested a weak UK construction report.
Growth in the construction sector was lower than expected in October, and stood as an unpleasant reminder of the fragile UK recovery.
The disappointing figures also stirred up anxiety about more stimulus ahead of Thursday’s Bank of England meeting.
