The US dollar index, which measures the greenback against a basket of six major currencies, slipped 0.63% to 100.13, the lowest since Nov. 17. The index reached an almost 15yr high of 102.05 on Nov. 24. The greenback also weakened to 2-1/2 week lows against a basket of currencies on Monday as investors viewed recent dollar strength as overdone.
The standout was the euro, which recovered from earlier weakness against the U.S dollar on Monday after Italian Prime Minister Matteo Renzi’s loss in a referendum over constitutional reform was seen by traders as largely expected and recent euro weakness was seen as having run too far. The single currency tumbled as much as 1.4% in Asian trade to hit $1.0503, its weakest since March 2015, before recovering to $1.0765, up 0.90% on the day.
Sterling retreated from its highest since July against the euro and steadied off two-month peaks against the dollar on Monday, in trading dominated by a rebound for the single currency after Italy voted against constitutional reform in a referendum. The pound briefly hit its strongest since early October against the dollar in early London trade, extending one of the currency market’s best runs over the past month. But it fell 0.98% against a broadly stronger single currency to trade at 84.60 pence per euro, having earlier hit an almost five-month high. On the day, the pound lost 0.1% to $1.2722, having hit a high of $1.2742 in early trade in London.
The Canadian dollar edged higher against its U.S. counterpart on Monday after sharp gains the previous week, as oil rose and domestic attention shifted to an interest rate decision by the Bank of Canada. The Loonie advanced 1.8% last week, its biggest gain in eight months, helped by stronger-than-expected domestic data and an agreement by members of the OPEC to cut output. The Canadian dollar was trading up 0.2% to C$1.3270. Speculators increased bearish bets on the Canadian dollar, according to Commodity Futures Trading Commission data on Friday. Net short Canadian dollar positions rose to 18,576 contracts in the week ended Nov. 29 from 17,462 in the prior week.
The New Zealand dollar skidded nearly 1% on Monday after Prime Minister John Key announced his surprise resignation and as global investors drove to safety after Italian Prime Minister Matteo Renzi said he would step down following a stinging defeat on constitutional reform. The New Zealand dollar fell to as low as $0.7070, in it’s the biggest percentage drop since Nov. 11. But since then has reversed towards the end of NY session to be up 0.1% at 0.7131. The Australian dollar was up the same 0.1% at 0.7471.
Egypt’s foreign reserves jumped to $23.058 billion at the end of November from $19.041 billion a month earlier, the central bank said on Monday, continuing its strategy of building reserves after floating the currency last month. The announcement was the first official reserve figure since the Egyptian pound was devalued on Nov. 3 in a bid to restore investor confidence and encourage foreign currency inflows. The flotation helped Egypt clinch a $12 billion, three-year loan from the IMF last month, of which it received $2.75 billion last month.
The Brazilian real strengthened on Monday on trader relief that mass weekend demonstrations refrained from directly targeting President Michel Temer. Demonstrators protested across Brazil on Sunday to denounce corruption and a congressional vote seen as an attempt to curtail sweeping graft investigations. The Brazilian real strengthened 1.6% after weakening 1.7% last week.
South Africa’s rand reversed to strengthen on Monday, adding to the strong rally it made on Friday after S&P Global Ratings affirmed the country’s investment grade sovereign rating, as risk aversion reversed in the later session with the euro into global markets. The rand was 0.55% weaker at 13.8100 per dollar compared with its overnight close at a three session high of 13.7850.
Weakness in the lira currency has put an additional financial burden on Turkish firms, although the corresponding increase in export revenues served as a natural protection, Finance Minister Naci Agbal said on Monday, according to the text of a speech. Turkey’s lira has lost around a fifth of its value this year, hitting a series of record lows on the resurgent U.S. dollar and concerns about the crackdown that followed a failed July 15 coup.