CURRENCIES: Surprise China Rate Cut Pushes Dollar Higher


LONDON (MarketWatch) — The dollar shrugged off a slate of weak economic data Monday to trade higher against the euro, yen and pound, benefiting from a surprise rate cut from the People’s Bank of China.

The central bank cut its benchmark lending and deposit rates by a quarter of a percentage point on Saturday, raising concerns about flagging growth in the world’s second-largest economy.

Th move highlighted the divergence between the U.S. economy and economies in Asia and Europe, said Jameel Ahmad, chief market analyst at FXTM.

“At a time when so many central banks are shifting stance and unexpectedly easing monetary policy, optimism that the Federal Reserve will still be raising US interest rates at some point this year is enough to support the USD uptrend,” Ahmad wrote.

The euro (EURUSD) fell to $1.1195, flat compared with its Friday-afternoon value of $1.1198. The buck (USDJPY) traded at 120.08 yen, its highest level in nearly three weeks. It traded at Yen119.63 Friday. The pound (GBPUSD) traded at $ 1.53, compared with $1.54 Friday.

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