Greenback under renewed pressure as equities move higher
By William L. Watts, MarketWatch
LONDON (MarketWatch) -- Equity markets continued to set the tone in currency trading Monday, with the dollar edging lower as investors showed continued appetite for stocks and other assets.
"While the news stream has been light, the positive start to the earnings season from both the financial and non-financial sector is helping to bolster sentiment," wrote strategists at Brown Brothers Harriman.
That's left the dollar and the Japanese yen to lose ground. Both low-yielding currencies have tended to come under pressure as equities rise. Conversely, both have tended to benefit when economic and financial fears are on the rise.
The euro changed hands at $1.4236, up from $1.4119, after hitting its highest level since early June. The British pound bought $1.6543, up from $1.6357.
The dollar index (DXY 78.84, -0.54, -0.67%) , which tracks the greenback against a trade-weighted basket of six major currencies, was at 78.878 down from 79.475 in North American trade late Friday.
U.S. stock index futures pointed to a higher opening for Wall Street. Sentiment was bolstered by news troubled lender CIT Group (CIT 1.33, +0.63, +90.00%) was set to receive a lifeline that would allow it to avert bankruptcy. Read Indications.
"News that CIT were in a tentative deal with a bondholder group in securing a $3 billion rescue package lifted investor sentiment," said Sue Trinh, senior currency strategist at RBC Capital Markets, in emailed comments.
CIT Group Inc. has reached a $3 billion rescue-financing agreement with key bondholders that will allow the business lender to avoid bankruptcy and to restructure outside court. See full story on CIT.
The dollar bought 94.47 yen, up slightly from 94.33 yen late Friday. Yen trading was light due to a national holiday in Japan.
