Dollar Soars to 2019 High Even as Trump Laments Its Strength
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The ascent of the dollar is proving almost unstoppable.
While U.S. President Donald Trump lamented its strength on Twitter, the greenback continued to surge Aug. 19, taking a Bloomberg index of the U.S. currency to its highest level of 2019.
The dollar strengthened as investors shifted into riskier assets such as stocks and away from havens like Treasuries, which drove up U.S. debt yields and supported the American currency. Apparent progress in trade negotiations helped buoy sentiment, as did the prospect of additional stimulus in Germany. The Bloomberg gauge hit its highs of the day after Federal Reserve Bank of Boston President Eric Rosengren downplayed the need for more rate cuts.
“We’ve been skeptical that Fed easing by itself would doom the dollar,” said John Velis, a currency strategist at Bank of New York Mellon. “With other central banks expected to ease by as much or even more than the Fed, we always thought it would take more than policy differentials to weaken the currency. Boston Fed President Rosengren’s hawkish comments today underscore the lack of downward force on the dollar coming from policy expectations.”
The U.S. currency gauge climbed as much as 0.3%, pushing it past its May peak to a level last seen in December. The dollar rose as much as 0.3% against the yen, while the euro slipped as much as 0.1% against its American counterpart.
Yields on 10-year Treasury notes climbed to 1.60% and the S&P 500 moved higher by 1.2%.
