Dollar Pares Bessent-Driven Gain on Shutdown Risk
The dollar slipped against Group-of-10 peers, giving back some of Wednesday’s rebound as risk sentiment waned on concerns over a potential US government shutdown and renewed US-Iran tensions.
The Bloomberg Dollar Spot Index fell 0.2% in early Asian trading, while gold rallied above $5,500 an ounce. The gauge rose 0.4% Wednesday after Treasury Secretary Scott Bessent said the US was “absolutely not” intervening in the Japanese currency market and reiterated a strong dollar policy.
US Democratic lawmakers demanded new constraints on President Donald Trump’s immigration crackdown in exchange for their votes to avert a potentially prolonged government shutdown starting Saturday; Trump warned Iran to make a nuclear deal or face military strikes.
“There is more to this streak of dollar weakness than just intervention speculation,” said Fiona Lim, a senior strategist at Malayan Banking Bhd.
“We are looking at a possible partial government shutdown, and Trump’s repeated threats to strike Iran could be negative for the dollar as well”.
“We are just looking at a strong bearish dollar trend that very few wants to challenge at this point. Bessent helped to slow its momentum with his comments, but the series of events thus far in January had spurred some kind of re-rating in the US dollar”.
Yield on 2-year Treasuries inched less than 1 basis point lower to 3.57%. S&P 500 Index futures declined 0.2%.
USD/CHF fell 0.2% to 0.7670.
USD/JPY slid 0.3% to 152.97.
AUD/USD declined 0.2% to 0.7030.
NZD/USD fell 0.2% to 0.6051.
Source : Bloomberg.com
