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Dollar higher against most major currencies, but drops against kiwi as markets rise

Dollar higher against most major currencies, but drops against kiwi as markets rise

Surging markets lifted the dollar against most major currencies Monday, but the New Zealand dollar hit a record high against the greenback, boosted by rising stock and commodity prices.
The 15-nation euro traded at $1.4825 late Monday, unchanged from late Friday in New York, while the British pound slipped to $1.9667 from $1.9687.
The pace of sales of existing U.S. homes fell to its lowest level since 1999. Sales of single-family homes and condominiums fell by 0.4 percent in January, and the median price for a home slid for the fifth consecutive month, said the National Association of Realtors.
But some economists considered the housing figure a bottom for the troubled sector, sending stocks higher on the hopes that the situation will improve in the future.
Stocks shot up in late trading as rating agency Standard & Poor's backed top-notch "AAA" credit ratings on troubled bond insurers MBIA Inc. and Ambac Financial Group Inc., reassuring Wall Street.
The dollar surged to 108.07 Japanese yen from 106.93 yen and 1.0889 Swiss francs from 1.0838 Swiss francs. The "carry-trade currencies" tend to trade inversely to the market.
Carry trades, common when investors' economic outlooks brighten, involve borrowing currencies from countries with low interest rates and investing the funds in higher-yielding assets elsewhere. Carry-trade beneficiaries are often the euro and currencies of countries with high interest rates, such as the New Zealand dollar, or "kiwi," and the Australian dollar.
The kiwi hit a record high at 81.15 U.S. cents per kiwi in morning trading, according to Dow Jones' Interbank foreign-exchange rates, the strongest since it began trading freely in 1985 against the dollar. The kiwi settled to 81.01 U.S. cents in late trading Monday in New York from 80.72 U.S. cents late Friday.
"Precious metal prices are at a near-record high, non-precious metal prices are also elevated. Agricultural and farming commodity prices have surged," said Michael Woolfolk, senior currency strategist at the Bank of New York. The higher commodity prices, along with oil circling $100 per barrel, benefit commodity-backed currencies such as the New Zealand and Canadian dollars.
The dollar fell to 99.72 Canadian cents from $1.0154 Canadian dollars late Friday.


Updated : 2021-01-22 21:27 GMT+08:00