U.S. Dollar Slips on IMF Comments, Rebound in Pound

Investing.com - The U.S. dollar slipped on Thursday after the International Monetary Fund (IMF) said the currency is overvalued, while a rebound in the pound also weighed.

The U.S. dollar that tracks the greenback against a basket of other currencies slipped 0.1% to 96.762 by 1:05 AM ET (05:05 GMT).

The IMF said overnight that the greenback was overvalued by 6% to 12%, based on near-term economic fundamentals.

Concerns about the unresolved U.S.-China trade conflict was also cited as a catalyst for the selling.

In other news, San Francisco Fed president Mary Daly told Reuters in an interview that she wasn’t “leaning one way or the other” as regards an interest rate cut at the Federal Open Markets Committee meeting in two weeks’ time. Markets have come to see a 25-basis point cut as a done deal.

U.S. President Donald Trump has said previously he wants to weaken the dollar to support growth.

Meanwhile, the British pound steadied today after falling to its lowest in more than two years on Wednesday on fears over a “Hard Brexit.”

The GBP/USD pair last traded at 1.2438, up 0.1%.

The Times of London reported that Boris Johnson, who has already pledged to take Britain out of the EU in October even if that means scrapping a transitional deal, is looking to call a general election as early as next year.

Johnson is reportedly the favourite to win the current Conservative Party leadership contest and take over as Prime Minister.

The AUD/USD pair and the NZD/USD pair rose 0.3% and 0.1% respectively.

The USD/JPY pair fell 0.2% to 107.70 as the Japanese yen drew some safe-haven demand today amid falling Asian stock markets.

Related Articles

Short bets on most Asian currencies recede on Fed rate-cut prospects

Pound Jolted Out of Summer Slumber as No-Deal Brexit Din Grows

Bank of Korea Unleashes Surprise Rate Cut as Trade Risks Grow