The US dollar is heading towards a weekly loss against major currencies after the US Federal Reserve joined global counterpart banks to cut interest rates to support faltering economic growth.
The 10-year decline in US 10-year Treasury yields to less than 2% and gold above a major technical resistance level to a six-year high suggest that the dollar may face a long period of selling pressure, traders and analysts said.
The focus now shifts to whether the United States and China can resolve their trade dispute at the summit of G-20 leaders in Osaka, western Japan.
The dollar was trading at 107.11 yen, but fell yesterday, to a five-month low of 107.04 as pressure continued, as Federal Reserve Chairman Jerome Powell hinted that the central bank would cut interest rates at its monetary policy meeting next July.
The dollar fell 1.4% against the yen in a week, heading towards its biggest decline since late March 2019.
The dollar index, which tracks the performance of the US currency against six currencies, was 96.586, down 1% on a weekly basis.
The pound traded at $ 1.2704, moving up 0.9% on a weekly basis, while the best performance in seven weeks. The euro hit $ 1.1295 yesterday, unchanged, but rose 0.8% in a week.
Tensions between the United States and Iran helped stem the rise in the European stock market yesterday, after a strong rally prompted by signals from major central banks that they were about to take further action to support the slowing global economy.
Asian stock markets fell, and the STOXX 600 European index, which has risen around 5% since the start of the month, remained stable. The telecom sector recorded a performance above the market, up 0.4% after Telecom Italy signed an agreement that opens the door to the integration of its fiber-optic network with rival OpenPaper.