The Malaysian Insider

NEW YORK, Nov 10 — The dollar rose broadly today from a 15-month low touched in the prior session as investors saw yesterday’s fall as too far, too fast.
Analysts said investors lacked any catalyst to take the dollar much lower after its recent sharp falls, but added that the trend towards dollar weakness remained in place.
Sterling was one of the big movers on the day. falling after Fitch said the UK was the major economy most at risk of losing its AAA rating.
“There is a slight pullback in risk appetite overnight,” said John Doyle, foreign exchange strategist at Tempus Consulting in Washington. “Yesterday, we might have moved a little too far, too quickly.”
In early New York trade, the dollar index, the dollar’s performance against six major currencies, was up 0.2 per cent at 75.145. Yesterday, it fell about 1 per cent to a low of 74.93, its weakest since August 2008 and the biggest one-day drop since late July.
The euro edged down 0.2 per cent to US$1.4970 (RM5.00898), though still close to its 2009 high above US$1.5060.
“The single currency is struggling to hold on to the US$1.50 handle, and with the softer tone in the equity and commodity markets, the euro is likely to give up ground in New York trading,” Brown Brothers Harriman analysts said in a note.
A weaker-than-expected German ZEW economic sentiment index showed that investors were more gloomy than at any time in the last four months.
Expectations that US interest rates will stay near zero well into next year have encouraged investors to use the dollar to fund carry trades in higher-yielding assets, particularly when equity markets rally.
The Australian dollar, a relatively high yielder, was down 0.2 per cent at US$0.9277. It had climbed well above the US$0.93 level after strong Australian business confidence data, though it stopped just shy of a 15-month high.
Sterling fell after Fitch Ratings said that of the four major economies with top-notch AAA status, the UK was the most at risk, sending the pound down sharply to shed as much as a cent and a half on the day against the dollar.
David Riley, co-head of global sovereign ratings at Fitch, said if there was another significant fiscal stimulus package in highly indebted Britain its rating would be at risk.
“The Fitch news was a reminder of the longer-term issues facing the UK,” said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt.
The pound slipped down to the US$1.66 level, well below a three-month high reached on Monday, and fell to beyond 90.00 pence per euro.
Early in the New York session, it had pared some of those losses, but was still down 0.3 per cent against the dollar at US$1.6788, while the euro was up 0.2 per cent at 89.62 pence.
A host of officials from the Federal Reserve were scheduled to speak today, and the market will watch what they say regarding the outlook for interest rates and the eventual withdrawal of easy monetary policy measures.
Elsewhere, the yen pared earlier losses against the euro, though it remained 0.4 per cent lower at 134.39. The dollar edged down 0.3 per cent to ¥89.79. ? Reuters