Dollar Weakness Continues To Drive Gold Prices, Higher Bond Yields Limit Support

The Bloomberg Dollar Spot Index slid 0.3% to its lowest level since May 2016. Graphic by Naveen Kumar Saini  Mint

The Bloomberg Dollar Spot Index slid 0.3% to its lowest level since May 2016. Graphic by Naveen Kumar Saini Mint

An official of a foreign exchange margin trading service firm said, "It will be hard for market players to actively buy the dollar if uncertainties over the Trump administration remain strong".

MSCI's broadest index of Asia-Pacific shares outside Japan reversed earlier losses to edge up 0.2 percent.

A man speaks his on his cellphone next to an index board at the reception hall of the Stock Exchange in Athens yesterday. Hong Kong's Hang Seng added 0.5 percent.

Japan's Nikkei added 0.5 percent after the dollar rallied against the yen overnight to pull away from seven-week lows.

In early European trade London lost 0.2 percent, Frankfurt shed 0.1 percent and Paris rose 0.3 percent. Scaramucci has a highly-respected resume, having served as a successful hedge fund manager and the U.S. Export-Import Bank's senior vice president. The index was flat on Monday. The euro was at $1.1638-1639, against $1.1638-1638, and at ¥128.98-129.00, down from ¥130.06-06.

Against the euro and the USA dollar, the kiwi dropped to 1.5715 and 0.7426 from last week's closing quotes of 1.5640 and 0.7453, respectively.

ECB President Mario Draghi's comments on Thursday, which conspicuously avoided citing the euro's recent strength as a problem, emboldened traders convinced the central bank will begin tapering its bond-buying program later this year.

"For any chance of the dollar bouncing back in the near term, it will need a rebound in USA yields", said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.

On Tuesday, the euro rose as high as $1.17125, its highest since August 2015, and just a hair below a 2-1/2 year high, boosted by a stronger-than-expected German business survey.

The New Zealand dollar weakened against other major currencies in the Asian session on Monday, as Asian stock markets are mostly lower on Monday following the negative cues from the Wall Street and European markets, as well as the tumble in crude oil prices Friday.

The dollar was steady at 111.915 yen after surging about 0.7 percent overnight.

The dollar slumped a more than one-year low against a basket of currencies on Tuesday as investors grew more wary on the short-term outlook although they held off placing more bearish bets ahead of a Federal Reserve meeting starting today.

The Fed beings its meeting on Tuesday to discuss its monetary policy stance and the timing of a long-awaited balance sheet reduction, a plan seen as likely to be detailed in September. The gross domestic product report follows the two-day Fed policy meeting.

However, gains were capped by a consultant's forecast of a rise in OPEC production for July despite the group's pledge to curb output, which led to a plunge in prices on Friday.

September Brent crude futures gained 54 cents to settle at $48.60 a barrel, while NYMEX crude for September delivery rose 57 cents to settle at $46.34.

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