The dollar fell against most of its major peers, being under pressure from a host of negative factors. This includes heightened concerns about the partial closure of the US government and tensions between the White House and the Federal Reserve System.
Fears of a slowdown in the US and world economy led to a drop in the 10-year US yield by about 25 basis points in December, which exacerbated the growing burden on the dollar and further darkened its prospects.
The US currency suffered particularly against the yen. It is losing ground for eight consecutive sessions, as the widespread risk in financial markets benefited Japanese safe haven currency.
Analysts at Mizuho Bank believe that the sharp decline in the yield on 10-year US Treasury bonds had a negative impact on the dynamics of the dollar compared to peers. The yield on 10-year Treasury bonds has now dropped to 2.73% from 3% in early December.
The euro and the British pound rose 0.2% each. In recent months, the dollar has struggled to get rid of the growing list of bearish factors that have recently been caused by speculation about the prospects for interest rates in the US, falling bond yields and falling oil prices.
This prompted US President Donald Trump to intensify his criticism of Fed Chairman Jerome Powell, when the public conflict between the White House and the Fed caused investor discontent.
Trump again criticized the Fed on Monday, calling it “the only problem” for the US economy.
The partial closure of the US government also added to investor concerns about the growth prospects of the largest global economy. The US Senate was unable to break the deadlock due to Trump’s request for additional funds to build a wall on the border with Mexico, and a high-ranking official said that the closure could continue until January 3.
EUR / USD:
During the Asian session, the pair traded in the range of $1.1390 to $1.1485
GBP / USD :
During the Asian session, the pair rose slightly trading range of about $1.2680 to $1.2790
USD / JPY :
During the Asian session, the pair fell slightly from Y111.45 to Y110.30