Dollar retreats as trade optimism ebbs, dovish Carney weighs on pound


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Dollar retreats as trade optimism ebbs, dovish Carney weighs on pound

On Wednesday, the 3rd of July 2019, the American dollar had been struggling to reclaim some of its footings lost yesterday (July 2nd), as hopes of any near-term resolution of US-China trade spat had been waning, while safe-haven demands had again reemerged, sending the US bond yields to their lowest level since late 2016 and lifting the precious metal spot gold future prices to nearly six year highs at $1438.56 per ounce, up by 1.58 percent so far.

Aside from that the British counterparts of US yields had also echoed the leads of its American peers, which fell to 2-and-a-half-year low on much-dovish than anticipated comment from the Bank of England (BoE) governor Mike Carney, which eventually pulled the British currency down to 1.25s again.

Besides, while this report was being prepared, late-morning Asian trading hours, the dollar index measured against a basket of six major currencies on an average was slightly lower than yesterday’s (July 2nd) closure at 96.69.

Meanwhile, the pound sterling had been experiencing a steep sell-off and slipping below its technical support level at $1.2550 after losing about 0.35 percent yesterday (July 2nd) ahead of a highly-congested PM election amid a bundle of horrible factory data alongside a nearing Brexit deadline.

Nonetheless, the British currency began to fall yesterday and lost more than 1 percent this week after BoE Governor Mike Carney had reiterated the risks of a no-deal Brexit on Tuesday (July 2nd), while a senior strategist at Barclays Tokyo, Shinichiro Kadota said, “The dollar fell below 108.00 yen again in light of BoE Governor Carney’s dovish comments, which helped depress global bond yields. Yields declined as the BoE, up until now, was seen as the only central bank which was not as dovish as others”.