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Investors pile into riskier assets

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Cryptocurrencies remain under pressure

(US Afternoon Updates)

By Saqib Iqbal Ahmed

NEW YORK, Nov 11 (Reuters) – The dollar fell broadly for the second day in a row on Friday as investors favored riskier currencies following signs of slowing U.S. inflation that encouraged the Federal Reserve to ease its strong interest rate hikes. .

Friday’s dollar weakness was an extension of a move sparked after Thursday data showed US consumer inflation rose 7.7% year-on-year in October, its slowest rate since January and lower forecast of 8%.

Against a basket of currencies, the dollar fell about 3.8% over two sessions, in pace with its biggest two-day percentage loss since March 2009.

The U.S. currency’s long rally over the past two years has drawn a host of dollar bulls leading to crowded positioning and Thursday’s data left many looking for a quick exit, analysts said. strategists.

“It’s not just the short-term trend followers, the momentum players that need to get out of their positions, but some long-term structural dollar positions that need to be unwound,” said Marc Chandler, chief market strategist at Bannockburn. Global Forex in New York.

The dollar was down 1.7% against the Japanese yen at 138.55 yen while the euro was up 1.46% against the US unit at $1.036.

“The dollar is one of those markets that is extreme in its overvaluation – chances are we’ve seen the peak,” Jim Cielinski, global head of fixed income at Janus Henderson Investors told Reuters on Friday. Global Market Forum.

Still, some strategists have warned that dollar bears remain vulnerable to a possible short-term bounce.

“Yes, more people have become convinced that the dollar has peaked, but the move has been so sharp that I advise people against chasing it,” Bannockburn’s Chandler said.

The dollar found little support in Friday’s survey data which showed U.S. consumer confidence fell in November, driven by lingering concerns about inflation and rising borrowing costs.

The risk-sensitive Australian and New Zealand dollars rose 1.4% and 1.6% respectively against the greenback.

Investors’ risk appetite received an additional boost from China’s health authorities, who eased some of the country’s strict COVID-19 restrictions, including shortening quarantine times for close contacts. cases and incoming travellers.

The pound, meanwhile, rose 1.22% against the dollar to hit $1.1853 after UK data showed the economy did not contract as much as expected in the three months. ending in September, although it is still entering what is expected to be a long recession.

The dollar was down 2.4% against the Swiss franc at 0.94025 francs after Swiss National Bank President Thomas Jordan said on Friday that the bank was ready to take “all necessary measures” to bring inflation back to its target range of 0-2%.

Cryptocurrencies remained under pressure from the ongoing turmoil in the crypto world after the fall of the FTX exchange. FTX’s native token, FTT, was last down 26.7% at $2.731, taking its month-to-date losses to almost 90%.

Bitcoin fell 4.6% to $16,747.

(Reporting by Saqib Iqbal Ahmed; Additional reporting by Anisha Sircar in Bengaluru; Editing by Richard Chang and Emelia Sithole-Matarise)