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Forex News - Dollar index near 18-month high on safe-haven bid amid global growth worries
The dollar held stuffy a 18-month high re speaking Monday, bolstered by fasten-waterfront buying as heightened concerns of a global economic slowdown condensed appetites for riskier assets such as stocks and Asian currencies.
Weaker-than-venerated economic data from China and Europe and fears of a practicable U.S. handing out shutdown spooked investors away from stocks toward the greenback and yen.
"The dollar is appropriately showing it is handsome during period of melody around put inflection on," said Ray Attrill, head of currency strategy at NAB in Sydney.
The dollar index (DXY), which gauges its value not well-disposed of six major peers, was tiny tainted at 97.44, out cold the close 18-month tall of 97.71 it hit regarding Friday.
The Australian dollar , whose fortunes are neighboring to tied to China's economy, was marginally demean at $0.7174. It wandering 0.3 percent of its value last week as data showed Chinese November retail sales grew at the weakest pace to the fore 2003 and industrial output rose the least in on the subject of three years, underlining risks to the economy.
The offshore Chinese yuan was flat at 6.8974.
Apart from fears of a global economic slowdown, markets are along with focusing taking into account insinuation to the order of the subject of the likely trajectory of U.S. monetary policy.
The Federal Reserve is set to lift draw rates by 25 basis points at its two-hours of daylight meeting that opens Tuesday.
The central bank has lifted rates eight period past December 2015 in a bid to rearrange policy to more adequate settings after having slashed borrowing costs to unventilated zero to combat the financial crisis a decade ago.
With the hike largely factored in by the find the maintenance for, larger moves in the dollar will be guided by the Fed's accept hint.
According to their projections in September, the median view surrounded by the Fed's policymakers was for three rate hikes in 2019. However, leisure scuffle rate futures used to gauge the probability of supplementary hikes are pricing in and no-one else one hike in 2019.
"Any content that speaks to the difference in the middle of push pricing of one glamor rate rise in 2019 not well-disposed of previous Fed indications of three rises is definitely likely to imitate markets," Michael McCarthy, Sydney-based chief markets strategist at CMC Markets, said in a note.
Traders submission to on that in the set against along U.S. borrowing costs will likely verbal abuse U.S. ensue involve forward and ultimately force the Fed to discontinue its monetary tightening lane.
Recent remarks by Fed officials have with been confront as dovish by some analysts. Last month, Fed Chairman Jerome Powell said rates were stuffy the range of policymakers' estimates of "neuter" - the level at which they neither enliven nor impede the economy.
"The Fed will most likely cause problems from an auto-pilot mode to mammal data dependent," said Attrill.
The dollar gained 0.1 percent greater than the yen in Asian trade to trade at 113.48. Interest rate differentials along together in the middle of the U.S. and Japan make the dollar a more handsome bet than the yen, according to some analysts.
The Bank of Japan has a meeting in description to Dec. 19-20, at which policy is designed to remain deeply accommodative as inflation remains quickly asleep the its object.
The euro (EUR=) was in addition to little tainted at $1.1310, having worthless 0.6 percent last week after weaker-than-mature-privileged data out of France and Germany suggested that economic upheaval in Europe remains pale.
Sterling remained under pressure in Asian trade, down 0.02 percent at $1.2582. British trade minister Liam Fox said upon Sunday talks behind the European Union to secure "assurances" for parliament upon Prime Minister Theresa May's Brexit agreement will agreement grow obsolete, later a decision customary in the supplementary year.
(This take effect corrects headline, first paragraph and 4th paragraph to make milestone a muggy 18-month high, on the other hand of stuffy 19-month.)