(Bloomberg) -- The dollar gauge jumps the most in three weeks, resuming a rally and pushing currencies in the Group of 10 sharply lower. The euro dropped 1% against the US dollar as a political crisis in France is weighing on the common currency.
- The Bloomberg Dollar Spot Index rose 0.7% after three days of declines
- President-elect Donald Trump warned the so-called BRICS countries he would require a commitment that they wouldn’t create a new currency as an alternative to using the greenback, and repeated threats to levy a 100% tariff if they did. This is a tactic that risks backfiring, market watchers say
- US manufacturing activity shrank in November by less than forecast as a gauge of new orders moved into expansion territory for the first time in eight months
- “We caution that the dollar’s valuation appears overstretched at current levels, and we recommend investors use periods of USD strength to reduce US dollar exposure,” said Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management
- The Swedish krona, Norwegian krone, Danish krone, euro and the Australian dollar fell 1% or more against the greenback Monday
- EUR/USD fell 1% to 1.0471
- “The eurozone is in the midst of a perfect storm of political paralysis combined with economic recession,” said Win Thin at Brown Brothers Harriman. “I can see no reason to be anything but negative on the euro”
- French bonds and stocks are under pressure due to a potential no-confidence vote in the government
- “We could see a further 1% move against EUR should a no-confidence vote topple the government,” said Helen Given, a foreign-exchange trader at Monex. “France’s budgetary woes have been a known quantity for some time and the risk of a no-confidence vote has been on the table already”
- GBP/USD down 0.9% to 1.2622
- UK house prices rose by the most since March 2022, according to one of the country’s largest mortgage lenders
- USD/JPY rose 0.2% to 150.10
Reporting by Anya Andrianova and Vassilis Karamanis
