Dollar falls to four-month low amid partial U.S. government shutdown. On Tuesday, the dollar fell against the yen and Swiss France, as investors received confusing signals from Washington which struggled with an open confrontation between the White House and the Federal Reserve.
The US dollar fell 0.39 percent to 110.00 yen in early trading, indicating its lowest level since late August. It is projected to drop for a seven-day streak against the Japanese currency. The yen hit a 16-month high at 139.90 yen, against the British pound as well as a four-month high at 125.60 yen, against the euro.
US stocks jumped 2 percent while due to investors’ concern over the global economic slowdown in 2019, oil prices dropped more than 6 percent amid holiday week.
The Swiss franc jumped 0.2 percent to a 12-week high of 0.98355 to the dollar. Gold climbed to a six-month high of $1,269.30 per ounce. Wall Street’s volatility index rose to 36.10. The Canadian dollar reached C$1.3584 per U.S. dollar, a 19-month low of C$1.3614.
“People are saying this is a black Christmas,” a major Japanese bank’s veteran currency trader said.
looking at the escalating sell-off in equities, American Treasury Secretary Steven Mnuchin discussed with the President’s Working Group on Financial Markets.
“If talk of firing Powell becomes more realistic, that would undermine the Fed’s independence as a central bank and ultimately confidence in the dollar,” said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.