FX Roundup: Euro gains while dollar sees mixed trading

The dollar saw mixed trading against a basket of global currencies on Monday, while the euro notched upticks over a slow session in Europe.

At 1754 GMT, the dollar shed gains against the yen by 0.05% changing hands at JPY121.10. Meanwhile, the pound fell against the dollar to exchange at $1.4884 down by 0.07% but up from eight month lows, and the euro registered a 0.41% gain to change hands at $1.0913.

Following the US Federal Reserve’s decision to raise benchmark interest rates by 25 basis points last week, Chairwoman Janet Yellen assured the market that any future rate increases would be gradual and would depend on economic growth, cooling the dollar’s rally in the previous session.

Commodity linked currency crosses also got reprieve. The Australian dollar was broadly flat against its US counterpart exchanging at US$0.7174, down a mere 0.03%, while the New Zealand dollar was up 0.61% to change hands at US$0.6769. The greenback also shed gains against the Canadian dollar changing hands at CAD$1.3979, down 0.16%.

Kit Juckes, head of forex at Societe Generale, said, “The two G10 oil-sensitive currencies are both at levels from where further weakness is going to look more and more like an overshoot. USD/CAD hasn't traded above 1.40 since 2003.

“PPP' will never be a workable shorter or even medium-term FX trading tool, but Canada's proximity to the US and the porosity of the border between the two does mean that when labour and goods are this much cheaper in Canada than the US, there is an economic impact.”

In Latin America, the dollar traded lower against the Chilean (down 0.94%) and Colombian (down 0.13%) pesos, but rose 0.91% against the Brazilian Real and 0.15% against the Mexican peso.