The dollar hit a record low against the Swiss franc and a four-month trough versus the yen on Tuesday, as investors were sceptical that US President Barack Obama's call for compromise would lead to a swift breakthrough in deadlocked debt talks.
There was broad pressure on the greenback, with the New Zealand dollar climbing to a post-float high, the Australian dollar hitting a three-month peak, while the euro extended its gains versus the dollar after breaching chart resistance.
The dollar seesawed against the yen. Stop-loss dollar selling and speculative sales aimed at taking out an option barrier helped drag the dollar down to a four-month low against the Japanese currency at one point. But the dollar later briefly spiked higher against the yen, rising nearly a full yen from its four-month low in a matter of minutes. Market players said the dollar's gain stemmed from buying by a hedge fund and some Japanese banks and a short squeeze.
"Today's comments from Obama didn't offer any specifics and were more of a general appeal, so I think the market may have been disappointed with the lack of progress," said Christopher Gothard, head of FX for Brown Brothers Harriman in Hong Kong. The dollar fell 0.2 percent to 78.10 yen. Earlier, it hit a four-month low of 77.883 yen on trading platform EBS, edging closer to a record low of 76.25 yen hit in March.
At one point, the dollar struck a record low versus the Swiss franc of 0.8005. After trimming a bit of its losses, the dollar was down 0.6 percent at 0.8010 francs. Adding to pressure on the dollar, the euro rose 0.8 percent to $1.4489, its rise having gained steam after breaching a series of resistance levels, including the top of the daily Ichimoku cloud and trendline resistance drawn off a peak hit in May. One possible resistance, and upside target for the euro lies at $1.4519, a 61.8 percent retracement of the euro's May to July slide. The New Zealand dollar rising 0.6 percent to $0.8692, having struck a post-float high of $0.8708 at one point. The Aussie dollar rose 0.6 percent to $1.0911. Earlier, it hit a three-month high of $1.0926.
Comments
Comments are closed.