Dollar gains as fall in US stocks trigger risk aversion

The greenback gained against majority of its peers on Wednesday except the safe-haven jpy and chf as a selloff in U.S. Treasury yields and stocks triggered broad-based risk aversion. (Dow closed at 31,490, down by 1164 points or 3.57%)  

Versus the Japanese yen, dollar met renewed selling at 129.53 at Tokyo open and retreated sharply to 128.95 in Asia. Intra-day decline then accelerated in New York and tumbled to session lows at 128.02 due to risk-averse buying in jpy on fall in US yields and US stock market before stabilising.  

The single currency fell from 1.0563 at Asian open to 1.0495 in early European morning before moving sideways. The pair then met renewed selling at 1.0541 in New York morning and tumbled to an intra-day low at 1.0461 in risk-off trading.  

The British pound moved inside a narrow range in Asia before falling from 1.2495 at European open to 1.2372 on cross-selling of sterling especially vs euro. The pair then met renewed selling at 1.2435 at New York open tumbled to an intra-day low at 1.2330 in New York on usd's broad-based strength.  

Reuters reported British consumer price inflation hit an annual rate of 9.0% in April, the highest since official estimates began in the late 1980s, data showed on Wednesday. Their poll of economists had pointed to a reading of 9.1%. The Office for National Statistics said consumer price inflation was probably last higher sometime around 1982. Finance minister Rishi Sunak, under pressure to offer more help to households, said countries around the world were being hit by high inflation and the jump in the British data for April reflected last month's increase in regulated energy tariffs.  

Data to be released on Thursday

Japan machinery orders, exports, imports, trade balance, Australia employment change, unemployment rate, EU current account, construction orders, U.S. initial jobless claims, continuing jobless claims, Philly Fed manufacturing index, existing home sales, leading index, Canada new housing price index and producer prices.