The dollar weakened against all of its 16 most-traded counterparts as demand for higher-yielding assets rose amid speculation a reduction of monetary stimulus by the Federal Reserve is on hold.
The yen rose for the first time in four days against the dollar amid bets further policy measures may be needed to weaken the currency after Prime Minister Shinzo Abe’s coalition cemented control of parliament. Brazil’s real climbed, and Australia’s dollar rallied. Fed Chairman Ben S. Bernanke told Congress last week it was “too early” to decide to begin tapering the central bank’s bond purchases in September.
“Markets have settled down with the realization that Fed policy will remain very accommodative for a long period of time,” Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York, said in a telephone interview. “Emerging markets have seen some stabilization in sentiment. Emerging-market currencies, commodities are benefiting from more positive risk sentiment.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.