Dollar Steadies as Traders Await Trump’s Son-in-Law Testimony

  • Flows light on euro as summer holidays start across Europe
  • Hedge funds most bearish on dollar in more than four years

Redeker Says U.S. Needs Growth to Relieve Dollar Pressure

The U.S. dollar traded mixed against major currencies as investors waited for the testimony of U.S. President Donald Trump’s son-in-law on Monday in a probe into possible ties between his election campaign and Russia.

The euro, which climbed to its strongest level in almost two years last week, dropped as much as 0.3 percent on Monday to $1.1630 amid light flows as summer holidays started in Europe. Leveraged names increased their long positions on the currency against the U.S. dollar to the highest in more than three years in the week ended July 18, CFTC data show, while hedge funds and other large speculators were the most bearish on the dollar in more than four years ahead of the Federal Reserve’s meeting this week.

Jared Kushner, a senior adviser to Trump, will be interviewed by the Senate Intelligence Committee on Monday, while Donald Trump Jr. and former Trump campaign Chairman Paul Manafort will go before Senate committees on Wednesday.

“The hearings in the Russia affair, which will take place at the beginning of the week, will keep the focus on the U.S. administration’s lack of ability to act,” strategists at Commerzbank AG including Esther Reichelt said in a note to clients. “At the same time, it is highly improbable that the Fed becomes suddenly considerably more optimistic at its meeting on Wednesday.”

  • The Bloomberg Dollar Spot Index was little changed, after dropping for two straight weeks and touching lowest since May 2016 on Monday
  • USD/JPY seen pressured by analysts ahead of Kushner’s closed-door meeting with the Intelligence Committee
  • AUD/USD up 0.6 percent to 0.7960, eyeing resistance at July 20 high of 0.7989
  • EUR/USD slipped 0.1 percent to 1.1652
    • Growth in the euro-region economy started the third quarter at the weakest pace in six months as a composite Purchasing Managers’ Index fell to 55.8 from 56.3 in June
  • Cable trades 0.3 percent higher to 1.3034
    • U.K. Trade Secretary Liam Fox will meet his U.S. counterpart in Washington on Monday as the U.K. seeks a trans-Atlantic trade deal as soon as possible after leaving the European Union

— With assistance by Garfield Clinton Reynolds

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