NEW YORK, June 29 ― The dollar slipped to a three-day low against the euro today after European Union leaders reached an agreement on migration that eased pressure on German Chancellor Angela Merkel, but the greenback remained on track to log its best quarterly performance in six quarters.
European leaders reached a deal on migration in the early hours of today after tortuous talks, but details were vague, and German Chancellor Angela Merkel conceded differences remained on an issue that threatens her political career.
The summit took place in an atmosphere of political crisis, with Merkel under intense pressure at home to take a firmer stance on migration.
“The EU accord is helping to boost sentiment in the euro area,” said Karl Schamotta, director of global product and market strategy, at Cambridge Global Payments in Toronto.
The euro was up 0.85 per cent against the dollar at US$1.1665 (RM4.7031).
The dollar index, which measures the greenback against a basket of six currencies, was down 0.77 per cent at 94.653.
Schamotta also pointed to a rally in the British pound to a two-day high after a better-than-expected revision to Britain’s first-quarter economic growth raised hopes of monetary policy tightening in the coming months, as pressuring the greenback.
Data today showed consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.2 per cent in May. Data for April was revised down to show spending rising 0.5 per cent instead of the previously reported 0.6 per cent jump.
“That suggests that perhaps consumers are not as positive about the future as had been hoped,” said Schamotta.
“One data point does not make a trend, but that damping of consumer spirits is something that market participants are quite concerned about,” he said.
Still, the dollar index was on pace to finish the quarter up more than 5 per cent, supported mainly by diverging monetary policy ― the idea that the US Federal Reserve is going to normalize policy more quickly than other major central banks.
The Mexican peso hit a one-month high against the US dollar, ahead of Mexico’s presidential election on Sunday.
The Canadian dollar strengthened to a 10-day high against its US counterpart after a surprise expansion of the domestic economy in April raised expectations for a Bank of Canada interest rate hike next month.
China’s yuan was set for its biggest monthly fall on record, as investors grappled with worries that a bitter Sino-US trade row could rattle the world’s second-biggest economy. ― Reuters
Source: The Malay Mail Online