The dollar rose as concerns grew that U.S.-China talks would not heal a rift over trade between the world’s largest economies. The Swiss franc slid in a mini “flash-crash”, dropping 1% during Monday’s Asia session.
A Japanese public holiday meant that markets were quiet. Thin liquidity helped cause a mini recurrence of the “flash crash” that hit foreign exchange markets early last month.
Within a matter of minutes, the Swissie slid from 1.0004 per dollar around 2200 GMT on Sunday to as low as 1.0095, the lowest since November. After that it reversed the move almost as suddenly to trade 0.2% stronger on the day.
The move was similar to the whiplash that saw the yen jump 7% against the Australian dollar early on Jan. 3, when Japanese markets were nearing the end of a week-long New Year holiday break.
The franc soared as much as 30% in 2015 after the SNB shocked markets by scrapping the franc’s peg to the euro.
At 12:30 GMT the Swiss franc was down 0.2% at 1.002 francs per dollar. That was largely due to broad strength in the dollar. The greenback is being lifted by its safe-haven appeal as investors, worried about a sharp global economic slowdown.
The U.S. currency is headed for an eighth consecutive day of gains. High-level talks in Beijing this week are a leading focus for investors. Many traders see little prospect for a trade deal and instead expect an extension of the March 1 deadline.
The dollar’s recent strength has emerged despite the Federal Reserve striking a cautious tone at its policy meeting in January.
START TRADINGForex – Commodities – Dollar up on trade concerns – Swiss franc fell 1%
The dollar index, a gauge of its value versus six major peers, was 0.2 percent higher at 96.83.
The euro was a touch lower versus the greenback at $1.1315. The common currency came under pressure as core European government debt yields touched their lowest in over two years. The single currency has lost 2.5% so far this month.
The European Commission on Thursday sharply cut its forecasts for euro zone economic growth for this year and next.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.