Loonie, Aussie in focus while US dollar idles
Canadian dollar and Australian dollar were in focus on Monday ahead of their central bank meetings this week, while the euro and other major currencies held steady as traders reviewed the U.S. dollar's prospects.
With a quarter point rate cut by the Federal Reserve next week a near certainty as per market pricing, analysts say the dollar is looking tired after its long run-up in the four weeks since Donald Trump won the presidential election.
Morgan Stanley analysts even recommend being short U.S. dollars into the year end, calling it a «pain trade» for markets that are widely and heavily long the currency.
«Much of the US dollar-positive story is in the price — from strong US data to trade and fiscal risks — and positioning is fairly long dollars,» they wrote. «We sense investor sentiment on the whole is very constructive on the greenback, suggesting asymmetric risks for a 'pain trade'».
Against the yen, the dollar was down 0.17% at 149.78 yen while the euro stood at $1.0561, down 0.04% so far in Asia and up from Friday's low of $1.0542. The dollar index rose 0.03% to 105.98.
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