US Dollar Gains

Dollar Gains 3 Week High: IMF Cuts Global Growth

The IMF’s gloomy forecast for 2019 and 2020 global economy on Tuesday had investors clambering for a safe haven in the U.S. Dollar, which rose to 3-week highs.

That’s not all …

The International Monetary Fund cited China’s slowing economy, weakness in Europe and unresolved trade tensions, all combined to their gloomy forecast, spooking markets.

According to investors, the dollar is likely to come under further pressure as the government shutdown begins to kick in on domestic growth.

Strategists at Morgan Stanley are of the opinion that in the first quarter U.S. growth will probably fall below forecasts of an annual 2.2 percent, which is about half the growth in 2018 of 4.2 percent.

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Currency strategist at Credit Agricole in London, Manuel Oliveri thinks that the gains in the dollar are overdone and that later this week some guidance will be offered by the European Central Bank when they will begin tightening monetary policies.

Lack of growth in Europe and other regions has boosted the dollar which was considered a short trade since the end of 2018 on concerns that the Federal Reserve will halt the interest rate increases.


The dollar has gained 0.3 percent to the offshore yuan to 6.8157.

The euro fell to the weakest in 3 weeks by 0.1 percent to $1.135, down nearly 2 percent.

The pound sterling rose to $1.2916 or 0.2 percent.

The biggest rise in more than a week was the Japanese yen gaining 0.2 percent to 109.40 per dollar.

Strategist at Citibank, Osamu Takashima believes that the BoJ will revise their outlook for economic growth based on the inflation and the slowing global economy together with the depressed oil prices.

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