Sunday 21 January 2018

Greenback's depreciation continues as landmark lows recorded

Catarina Saraiva and Anchalee Worrachate

THE dollar slumped to a record low against the Australian dollar and touched the lowest level in 16 months versus the euro as signs that global growth is being sustained, boosted by demand for higher-yielding assets.

The greenback depreciated to the weakest in at least 40 years versus the Swiss franc and lows of two years or more against the Swedish krona, the South Korean won and the New Zealand dollar on speculation the Federal Reserve will lag behind other central banks in raising interest rates.

Sterling was one of the best performers among major currencies after a report showed retail sales unexpectedly rose.

"The dollar is being driven down against most major currencies," said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London.

"It's trend chasing, based on interest-rate differentials, which have been one of the easiest ways to speculate and make a profit, by selling the dollar."

The dollar depreciated 0.4pc to $1.4578 versus the euro in New York trading, from $1.4523 on Wednesday, extending this week's decline to 1pc.

It earlier slid to $1.4649, the weakest level since December 2009.

The greenback dropped 0.9pc to 81.78 yen, from 82.56, after touching 81.62, the lowest level since March 29. The yen appreciated 0.6pc to 119.24 versus the euro, from 119.90.

Sterling rallied to the highest level since December 2009 against the dollar as a report showed retail sales unexpectedly rose 0.2pc in March as spending on food surged.

The pound gained 0.6pc to 88p against the euro and advanced 0.9pc to $1.6563 after touching $1.6599, the highest level in 16 months.

Australia's dollar climbed as much as 0.6pc to $1.0775, the strongest level since it was freely floated in 1983, before trading at $1.0745, compared with $1.0714.

Irish Independent

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