LONDON: The dollar surged against a number of major currencies on Thursday after the US Federal Reserve played down any threats to this year’s planned rises in interest rates, solidifying expectations of another move in June.
The euro drew some support from centre-left candidate Emmanuel Macron’s performance in a TV debate ahead of Sunday’s French presidential election run-off, cooling gains for the dollar to less than half a cent at $1.0876.
But the rise in 10-year US government bond yields back above 2.32 per cent helped the dollar to a six-week high of close to 113 yen and 4-month highs against the Aussie dollar.
The weakness of the Aussie — typically a pro-growth play — at a time when the mood on stock markets is upbeat, stems from sharp falls in the price of iron ore and other commodities that suggest a rise in concern about the Chinese economy.
“Something is not right in the commodities space and it has not been right for two weeks,” said Richard Benson, co-head of portfolio investment with currency fund Millennium Global in London.
“The dollar is strong after the Fed but the euro cannot go down at the moment. With commodity prices falling, that means the strength plays out in the commodity FX space.” — Reuters
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