Safe-Heaven Dollar Bounce, Aussie Snapchat Slides as Mood Bad

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TOKYO – The safe-haven dollar hit some losses overnight on Tuesday, and the yen strengthened as U.S. stock futures sank following Snapchat’s profit warning, in a bad mood after a strong start on Wall Street this week.

The dollar index, which measures currencies against six major equivalents, rose 0.1% to 102.24, falling 0.85% on Monday, pushing it further away from the mid-month high of nearly two decades’ high of 105.

The greenback, however, slipped against the pre-famous Haven currency yen, down 0.18% to 127.695 yen.

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The euro fell 0.21% to 0 1.0672, although it has eased to 1.17% since Monday, when European Central Bank President Christine Lagarde said policymakers were likely to lift eurozone deposit rates from negative territory by the end of September.

The risk-sensitive Aussie dollar fell 0.46% to 70 0.70775, and the sterling fell 0.22% to $ 1.2558.

US stock futures showed a 0.81% slide for the S&P 500 and a 1.41% fall in Nasdaq’s resumption, tarnishing a strong session on Monday as the indices climbed 1.86% and 1.68%, respectively.

Traders have pointed to an after-the-profit warning from Snap, the owner of Snapchat, that stocks have fallen 28% in extended trading.

The dollar has depreciated along with Treasury yields from multi-year highs, with aggressive easing of pricing already set by the Federal Reserve.

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Meanwhile, US President Joe Biden’s remarks this week on the positive signs for the global economy, such as the expected recovery from Shanghai’s crippled COVID-19 lockdown in a few weeks and the possible easing of trade wars with China, have raised sentiment on dollar spending.

Revealing the global manufacturing PMI in Tuesday’s course will be another key focus for currency traders.

Commonwealth Bank of Australia strategist Joseph Capurso said, “If the data is good, the dollar should continue its easing trend as the global economy recovers from various shocks.”

“The US dollar is making a peak and commodity currencies like Australia are carving down, but it’s going to be uncomfortable.”

(Reporting by Kevin Buckland; Editing by Sonali Desai)

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