The Greenback falls as stocks advance and investors are willing to risk
The purchasing managers' index for the services sector rose to 55.3 in September rose after Goldman Sachs Group Inc. recommended large banks and a report showed U.S. service industries grew, spurring investors to buy riskier assets at the expense of the greenback. “It’s still the risk-on, sell-the-dollar trade,” said Brian Kim, a currency strategist at UBS AG in Stamford, Connecticut. “The economic data didn’t give anybody a reason to sell risk.” The Standard & Poor’s 500 Index increased 1.6 percent after Goldman Sachs raised its view on banks including Wells Fargo & Co., JPMorgan Chase & Co. and Bank of America Corp. to “attractive” from “neutral” and a report showed U.S. service industries expanded in September for the first time in a year. “The financial markets appear to have been encouraged into selling the dollar again by the lack of rhetoric in support of the dollar,” Derek Halpenny , European head of global currency research in London at Bank of Tokyo-Mitsubishi UFJ Ltd., wrote in a report today. The EUR/USD is currently trading at $1.4660 as of 21:25pm London Time.
The yen retreated earlier against most of its major counterparts after Japan’s Finance Minister Hirohisa Fujii issued his clearest warning yet that his nation is open to intervening in the currency market. “If currencies show some excessive moves in a biased direction, we will take action,” Fujii said after the Group of Seven meeting in Istanbul over the weekend. He declined to say if the yen is trading in such a way. Fujii’s position shifted since his initial remarks when he took office in September. He formerly opposed seeking a “weak” yen. The currency rose last week to an eight-month high of 88.24 against the dollar, threatening exporters’ profits. The USD/JPY is currently trading at 89.55 as of 21:26PM, London Time.
Sterling edged down against the euro on Monday, erasing earlier gains made after data showed Britain's services sector grew more strongly than expected. The pound remained pressured on expectations monetary policy would stay loose for some time with no change foreseen at a Bank of England policy meeting later this week. The purchasing managers' index for the services sector rose to 55.3 in September, beating forecasts for a reading of 54.5 and up from 54.1 the previous month.
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