Early trade in New York: Dollar rises against major currencies

NEW YORK: The dollar gained on Monday in choppy trading, with the euro languishing below $1.18 and commodity currencies falling, as the currency drew some safe-haven bids on concerns about the potential fallout of a hedge fund’s default on margin calls.

The dollar index, a measure of the greenback’s value against six other major currencies, hit as high as 92.919, its strongest level since November last year. It was last marginally up at 92.825.

“Focus today is on how US equities perform, especially given the hedge fund default that came out last week,” said Simon Harvey, senior FX market analyst at Monex Europe in London.

The euro, meanwhile, struggled on Monday as the prospect of tougher coronavirus curbs in France and Germany dimmed the short-term outlook for the European economy.

The single European currency slipped 0.1% to $1.1778, not far from last week’s four-and-a-half-month trough of $1.1762. On a monthly basis, it was down 2.3%, its biggest drop since July 2019.

Short yen positions have grown in recent weeks with hedge funds building their net short bets to 33% of open interest, according to ING data.

The dollar was last up 0.1% against the Japanese currency at 109.74 yen.

The Aussie was last down 0.1% at US$0.7636 on Monday and the New Zealand dollar was slightly down at US$0.7002. Sterling slipped to $1.3790.