Dollar away from nine-month low but central banks supporting rivals pound and euro makes it unsteady

Dollar surges

The U.S. dollar escaped from the nine-month low it touched last Friday. However the greenback is still unstable due to signs that central banks in Europe being away from accommodative monetary stimulus which provided support to the British pound and euro.

On the previous week, the U.S. currency suffered a series of declines as non-dovish remarks from central bank bankers have heightened forecasts that the Bank of Canada, European Central Bank (ECB), and Bank of England would later on move to tighten monetary policy.

The index that tracks the value of the greenback relative to its major opposing currencies, the U.S. dollar index, advanced more than 0.1 percent at 95.729. Last Friday, the index was lower at 95.470. Looking on the greenbacks performance, the dollar outperforms the Japanese yen at 112.435 yen following its short drop to 11.900 earlier ahead of jumping back immediately.

The movement of the yen was perceived as an automatic reaction to the Liberal Democratic Party of Japanese Prime Minister Shinzo Abe’s suffering a downfall in an election in Tokyo. This indicated a possible turmoil before the premier. Daiwa Securities’ senior currency strategist Yukio Ishizuki said the election in Tokyo would not strongly influence the market as there are no opposing parties in Japan that can quickly substitute the LDP.

Meanwhile in other currencies, sterling fell by 0.2 percent at $1.3003 after its advance last Friday to $1.3030. The euro was also lower by 0.1 percent to $1.1413 after reaching its 14-month high of $1.1445 on the previous trade. The Canadian dollar was also down by 0.15 percent to trade at C$1.2985 a dollar.