Dollar tumbles as U.S. political turmoil triiggers broad-based usd selling: May 18, 2017

Market Review - 17/05/2017  23:17GMT  

Dollar tumbles as U.S. political turmoil triiggers broad-based usd selling

The greenback tumbled across the board on Wednesday, falling to fresh multi-month lows against several peer curencies, as political trumoil grew in the U.S. due to talks that President Trump could face the threat of impeachment. 

Reuters reported news emerged on Tuesday that Trump had asked his now-dismissed FBI chief James Comey to end the agency's investigation into ties between former White House national security adviser Michael Flynn and Russia. 

Versus the Japanese yen, dollar remained under pressure in Asia and continued to ratchet lower, hitting 112.26 at European open. Price then met renewed selling at 112.55 in European morning and tumbled to 111.24 in New York morning on the greenback's broad-based selloff. Price resumed its intra-day descent and fell to a 3-week trough of 110.80 near the close. 

The single currency traded with a firm bias in Europe and climbed to 1.1112 ahead of European open and despite a brief pullback to 1.1081 in early European morning, euro rallied to a fresh 6-month peak at 1.1162 near New York close on dollar's broad-based weakness. 

The British pound also traded with a firm bias in Asia and gained to 1.2942. Cable then found renewed buying at 1.2906 in early European morning and rose to 1.2978 in Europe due to a drop in UK unemployment, then to a fresh 7-month peak at 1.2991 in New York morning on dollar's weakness. 

The Office for National Statistics said that the rate of unemployment unexpectedly dropped to 4.6% in March, beating expectations for it to remain stable at February's reading of 4.7%. That was its lowest level since 1975. 

In other news, EU Brexit negotiator Barnier said 'no intention to end up with no deal with UK, hopes for deal with UK, not against UK; no figures set yet for EU demands that UK pay b4 leaving; real Brexit transition period is now, before withdrawal, and all economic players shud prepare.' 

Data to be released on Thursday: 

Japan GDP, China House price, Australia employment change, unemployment rate, UK retail sales, U.S. jobless claims and Canada wholesale sale.