The narrow trade-weighted
USD index (DXY) has declined by about 0.6% over the last day, earlier printing a six-day low at 96.90, while EUR-USD rose to a six-day high at 1.1280 and USD-JPY posted a six-day low at 107.86.
* A boost for exports: At the turn of last year, the Federal Reserve's trade-weighted
dollar index showed that the U.S.
The pound has lost more than 13 percent in trade-weighted
terms since last year's decision to leave the European Union but Britain's trade deficit with the rest of the world remains huge.
LONDON: Sterling trade-weighted
index fell 1 percent to hit a three-week low on Monday, while the cost of hedging against swings over the coming month traded at its highest since late 2008 on growing concerns over whether Britain will stay in the European Union.
We would firstly note that FX weakness has so far largely been in line with the trade-weighted
basket which the authorities believe is a "more appropriate reference" for the currency than the bilateral rate versus the dollar.
Earlier in the month, the central bank introduced the trade-weighted
basket, a move that will eventually loosen the Chinese currency's link to the dollar and will let the yuan weaken.
Will it shift to target the RMB's trade-weighted
exchange rate, or will it continue to target the RMB-U.S.
index' (TWI) is one way of constructing an 'effective' exchange rate index, based simply on trading partners' share of New Zealand's foreign trade.
While it has fallen 7.5 per cent against the dollar this year, it has slipped just 4 per cent on a trade-weighted
The 2-year rate differential of the US versus the trade-weighted
G10 has risen to its most Dollar supportive level since 2009, as underscored also by our US economics team bringing forward their date for the first rate hike to Q3.'
A setback in stocks has felt overdue; bonds still look dear, as most market participants assume policy rates won't rise for a year at least; rust is growing on the emerging market boom; technology and pharmaceutical sectors are showing relative strength; and the dollar's trade-weighted
index is trading more pro-cyclically.