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Currencies in Commotion

Business & Markets Desk
Currencies in CommotionCurrencies in Commotion

The US dollar rose to a six year high against the yen, while gold held near a three month low, after disappointing US jobs data gave rise to speculation that the Federal Reserve will increase interest rates next year, while traders closely monitored the ceasefire in Ukraine.

Meanwhile in Tehran the greenback kept its bullish pace and hit 31,920 rials before correcting itself by 70 rials as traders kept pace with international news. 

The US currency went up 0.2 percent to 106.24 yen at 14:10 GMT after hitting its highest level since October 2008 on Tuesday, briefly reaching 106.38. 

The greenback also gained against the euro, after the European currency’s slide on September fourth, euro’s largest single day drop since the   beginning of 2013, as the European Central Bank president, Mario Draghi signaled an almost $1 trillion stimulus. 

It traded at $1.2850 per euro, while it went down by 100 rials to 41,400 rials in Tehran on Tuesday.

Platinum dropped to its lowest since April to $1396.25 per ounce. Gold in the spot market was $1255.02 an ounce at 14:10 GMT. It had fallen to $1251.18 Monday, a 2.7 percent drop since last Tuesday.

Gold’s fall coupled with low demand in Tehran drove down the price of gold coins, though the dollar’s rise against the rial cushioned the Azadi bullion coins fall, stopping it at 9,406,000 rials, down 0.32 percent since Monday’s close.

The dollar index, DXY, advanced by four percent in the past three months, rose and to a 14-month high despite disappointing payrolls data from the US as other data showed retail sales improved and jobless claims fell. The next Federal Reserve meeting is in mid-September.

Volatility in Iran’s market is restrained as signals from the central bank on unifying the foreign exchange rate regime is curbing traders’ enthusiasm.

 Pound’s Fall

With the prospect of an independent Scotland, the pound is continuing its slide, falling to its lowest since November.

The pound dropped for a sixth day on Tuesday to $1.6087 at 14:10 GMT, as an opinion poll by YouGov for last week’s Sunday Times showed a first time lead for a Scottish yes vote, before the Sept. 18 poll.

A breakup could lead to more conservative movements from the Bank of England, which has kept interest rates at a record low, to stimulate the British economy. This is the sharpest fall for the pound since June 2013.

 Chinese Yuan Revalued

The Chinese yuan strengthened to a six-month high as the People’s Bank of China raised yuan’s reference rate by 0.3 percent, largest increase since 2010, strengthening it to 6.15 per dollar.

The move by China’s central bank came after trade surplus reached an all-time high in August, as exports outpaced imports by $49.84 billion, exceeding the prior $47.30 billion record, set in July, according to Beijing-based customs administration.

The yuan stood at 5,350 rials in Tehran’s currency market.

Financialtribune.com