FT:Dollar strengthens as investors turn risk-averse
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The dollar was stronger against other major currencies on Monday morning trading in London, as market sentiment turned negative due to lack of confidence in the outcome of the recent EU summit.
The euro fell 0.8 per cent against the dollar to $1.3271 after Moody’s, the rating agency, warned that it might downgrade its AAA ratings for some European countries in a sign that the deal brokered by European politicians had failed to calm investors’ fears.
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A relatively successful Italian debt auction, with one-year government bonds sold at yields of 5.95 per cent, down from 6.09 per cent in an auction last month, failed to have much impact on the euro, which continued to trade lower after a brief bounce.
Sterling was 0.3 per cent lower against the dollar at $1.5606, while the yen was 0.2 per cent lower at Y77.80. The euro also fell 0.7 per cent against the yen to Y103.22, and was weaker against the Swiss franc, falling 0.4 per cent to SFr1.2334.
Scandinavian and commodity currencies were among the biggest losers on the day, with the Australian dollar falling 1 per cent to $1.0106 and the New Zealand dollar falling 1.1 per cent to $0.7660.
The Swedish krona was down 1.2 per cent at SFr6.8140 while the Norwegian krone dropped 1 per cent to NKr5.8051.
Analysts were waiting for key events in the week ahead including a possible interest rate cut from Norges Bank on Tuesday, and speculation the Swiss National Bank could raise the ceiling at which it is prepared to buy euros to weaken the franc when it holds its quarterly meeting on Thursday.
