Dollar rises on risk aversion due to global stock market rout – FXStreet

Credit: Original article can be found here

The greenback ended the day higher against majority of its peers except vs the safe-haven jpy and chf as a selloff in U.S. yields on the back of global stock market rout triggered broad-based risk aversion. (DJI ended down by 614 points or 1.78% at 33,970).  
  
Versus the Japanese yen, despite edging up to 110.03 at Asian open, price retreated to 109.87 in thin Asian trading as Japanese markets were closed on risk-off trade. Intra-day decline accelerated in Europe and dollar tumbled to session lows at 109.33 in New York in tandem with U.S. yields and broad-based safe-haven buying in jpy due to a selloff in global stocks before staging a minor bounce on short covering.  
  
The single currency met renewed selling at 1.1732 in New Zealand and retreated to 1.1710 in Asian morning and then fell to a near 4-week low of 1.1701 in European morning as selloff in global stocks triggered risk-aversion. However, the pair erased intra-day loss on short-covering and climbed back to 1.1736 in New York.   
  
The British pound opened higher to 1.3753 in New Zealand, however, the pair met renewed selling there and retreated to 1.3701 in Asian morning. Cable then tumbled to session lows of 1.3640 in New York on usd’s strength together with active cross-selling in sterling especially vs euro and yen.  
  
In other news, Reuters reported the European Central Bank is happy with the broad-based rise in inflationary pressures and still sees the current spike above its 2% target as temporary, ECB board member Isabel Schnabel said on Monday.     “What we are seeing are some upside chances to the inflation outlook,” Schnabel told a conference. “Given that inflation has been so low for so long, I think we have to be happy that inflation is moving up in the desired direction.”      “I think what we’re seeing (in economic developments) is very much in line with our projections,” Schnabel, the ECB’s head of market operations said. “So we do see a strong recovery‚Ķ the recovery is well on track.”  
  
Data to be released on Tuesday :  
  
New Zealand Westpac consumer confidence, China market holiday, U.K. PSNB, PSNCR, Swiss trade balance, exports, imports, U.K. CBI trends orders, U.S. current account, building permits, hosing starts, redbook, Canada new housing price index and New Zealand GDT price.