AMSTERDAM (Reuters) – The Swiss franc fell to a seven-month low against the euro on Monday as the Brexit trade deal remained in focus, as the dollar fell after US President Donald Trump signed a COVID-19 aid bill, preventing a government from closing.
The Swiss franc fell 0.3% to 1.08860 against the euro, the lowest since June 8. It remained unchanged against the US dollar at 88,835 cents at 0903 GMT.
“What we are seeing is a continuation of pricing due to a strong Brexit risk,” said Ulrich Leuchtmann, head of FX research at the Commerzbank in Frankfurt.
“I think a lot of market participants saw Swissie as an alternative to the euro (which) would have been hardest hit by a tough Brexit,” he said. Investors are likely to close these positions in subsequent sessions, he added.
The euro rose 0.1%, to $ 1.22370, nearly the two-and-a-half-year high of $ 1.2273 touched this month.
In the United States, Trump signed a $ 2.3 trillion pandemic aid and spending package, avoiding a partial shutdown of the federal government that would have begun on Tuesday.
The dollar fell 0.3% against a basket of currencies to 90,031, the lowest in a week.
The increase in risk appetite also affected government safe haven bonds, with a 10-year US Treasury yield at 2 basis points at 0.95%. Germany’s benchmark 10-year yield remained unchanged at -0.55%.
Meanwhile, the British pound added 0.1% against the US dollar to $ 1.3551, still keeping in view the $ 1.3625 mark it hit earlier this month for the first time. since May 2018.
It approached that level on Thursday, when Britain and the EU announced the trade deal.
The pound fell 0.5% against the euro to 90,280 pence.
“Markets are likely to wait until next week before buying again (pound sterling), for fear of massive bottlenecks in the English Channel as the new rules go into effect,” Jeffrey told customers Haley, senior market analyst at OANDA.
While the deal was a relief for investors, the nature of the pact leaves Britain much more detached from the EU, analysts say, suggesting that subsequent gains will be modest and the discount chasing UK assets United since 2016 will not disappear. soon.
Brussels has not yet made a decision on whether to grant Britain access to the blog’s financial market.
Mitsuo Imaizumi, chief FX strategist at Daiwa Securities in Tokyo, expects the pound and the euro to fall against the dollar, reaching $ 1.30 and $ 1.15 by the end of the summer, respectively.
The Australian dollar, a trade-sensitive currency, rose to 76,110 US cents, to 76,390 highs of 2 1/2 years reached this month.
Yields on 10-year bonds in southern Europe, considered most risky by their low credit ratings, fell 2-3 basis points.
The yuan rose after China’s central bank raised the official guidance level to a 30-month high, to a high of 6.5280 against the dollar in the land market, but did not change for the last time to 6.5408.
It fell 0.3% for the last time in the offshore market, to 6,5311.
The yen rose slightly against the dollar, 0.1% more, to 103,455. .
Political leaders at the Japanese power plant were divided on the extent to which they should examine the control of the yield curve and some called for a thorough review of the framework, a summary of views expressed in the review of the December rate.
Reports by Yoruk Bahceli; additional reports from Kevin Buckland in Tokyo; Edited by Andrew Heavens