The dollar was higher against its primary trading partners on Thursday morning, propelled by a recent slew of central bank announcements which took a decidedly dovish stance. The latest announcement was from the Reserve Bank of New Zealand which surprised analysts on Wednesday by commenting that the next interest move rate will likely be downward. The announcement came only a week after the Federal Reserve took a dovish stance after its last meeting. In its most recent announcement, the Fed said that it does not expect any further interest rate hikes in 2019. The European Central Bank’s president Mario Draghi expressed a similar sentiment in his last announcement as well.
The 10-Year U.S. Treasury note yield fell to 2.342 percent after the RBNZ announcement spurred fears of a global recession. The rate is the lowest for the bonds since December 2017. In Germany, 10-year yields also fell further into negative territory following Draghi’s announcement, and bond yields hit record lows in New Zealand and Australia on Thursday morning as well. The global downward trend sent traders towards safe-haven assets and provided a boost to the dollar.
The dollar index was up 0.16 percent to 96.93 .DXY as of 10:09 a.m. HK/SIN. The greenback eased against the yen, trading down 0.33 percent at 110.15, but it gained against most of its other trading partners. against the dollar to $1.3183. The British pound also struggled against the dollar after Prime Minister Theresa May announced that she will resign as the UK prime minister if the Brexit deal happens. May offered her future resignation in an exchange for support of her Brexit deal. If May’s Brexit deal is approved in the upcoming parliamentary vote, May will step down and allow her successor to bring the deal to fruition.
“I am prepared to leave this job earlier than I intended in order to do what is right for our party and country,” May is quoted by CNBC as saying.