Dollar under pressure across the board; EUR, CHF, GBP test multi-month highs
January 23rd - A myriad of concerns – ranging from the deteriorating geopolitical situation to high oil prices and the prospect of US rate hikes coming to an end – have combined to weigh on the dollar in recent trade. USD JPY has been toying with the 115 level through the week’s opening session in Tokyo but a general lack of buying interest has seen the greenback steady below this psychological level in recent trade. There’s little on the economic calendar today that can provide additional direction in the short term, so attention is likely to focus on crude and also any comments relating to the situation in Iran. The fact that US equities have come off so quickly in recent days has also generated a surplus of dollars which the market is looking to place elsewhere. The inevitable consequence of this is that many of the other major currencies are also looking somewhat robust, with Cable, the Euro and the Swiss Franc all rallying back to levels that haven’t been seen since late last year. Sterling’s move may yet prove to be unsustainable, especially depending on how this week’s Bank of England meeting minutes read, but the dollar is certainly looking vulnerable in the short term…
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