Dollar broadly stronger as Hong Kong unrest caps stocks
The dollar hit its highest in almost two years against the euro with German inflation data expected to keep pressure on the ECB to ease monetary policy further, while unrest in Hong Kong hurt Asian-exposed European shares.
The dollar was broadly stronger, hitting a four-year high against a basket of currencies, a six-year peak against the yen and a 13-month high against the New Zealand dollar.
Data on Friday showing higher U.S. growth in the second quarter fueled speculation that a Federal Reserve interest rate hike may come sooner than expected, in striking contrast with the outlook for the European Central Bank.
“The strength of the dollar is forcing investors to move away from a lot of the stock market assets and put it into the greenback,” said James Hughes, chief market analyst at Alpari.
“I see no reason to think that the dollar’s rally will come to an end any time soon… The main driving force – the divergence of monetary policy – is likely to remain in place for the next six months to a year at least,” Marshall Gittler, Head of Global FX Strategy at IronFX.
“Hong Kong is a real storm in a teacup but I’d sell HSBC after its outperformance,” Justin Haque, a broker at Hobart Capital markets said. “This is another layer that adds to a gloomy outlook for October.”
Source: reuters- Dollar broadly stronger as Hong Kong unrest caps stocks
