Dollar Mixed as Yen, Sterling Gain Ground
The U.S. dollar was mixed against the other major currencies on Wednesday as the yen gained ground on the back of geopolitical tensions and the British pound pushed higher with investors expecting Brexit to be delayed.
USD/JPY was down 0.12% to 110.43 by 03:34 AM ET (08:34 GMT) after touching a one-and-a-half week low of 110.36 overnight.
The safe haven yen was boosted as tensions between India and Pakistan escalated after Pakistan said it had shot down two Indian aircraft at its border. Sterling was trading near the previous session’s five-month highs, with GBP/USDadvancing 0.18% to 1.3273. The pound rallied on Tuesday after British Prime Minister Theresa May offered lawmakers the chance to vote on delaying Brexit, opening up the possibility of avoiding a no-deal Brexit. The British currency was trading near 21-month highs against the euro, with EUR/GBP down 0.24% to 0.8576.
The euro was a touch higher against the dollar, with EUR/USD at 1.1391.
The U.S. dollar index against a basket of six major currencies stood at 95.843 after shedding 0.42% on Tuesday, when it hit 95.81, its lowest since Feb. 6.
The drop in the greenback came after Federal Reserve Chairman Jerome Powell reiterated that the central bank would stay patient on monetary policy, and as the pound rallied.Powell said on Tuesday that rising risks and recent soft data were unlikely to prevent solid growth for the U.S. economy this year, but that the Fed would remain "patient" in its decisions on further interest rate hikes.
"The dollar's fall was a little puzzling as Powell's comments did not offer fresh insight. But the market was in a state where the dollar was sensitive to potential bearish factors, and the strong pound also weighed," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities.
Source: Investing.com & Reuters