The Wall Street Journal: Dollar closes in on 11-year high after China’s rate cut
The U.S. dollar surged in Europe Monday close to an 11-year high against a number of major currencies, boosted by Beijing’s decision over the weekend to cut interest rates for the second time in less than four months, in a further sign of global monetary policy divergence.
The dollar EURUSD, +0.12% added around a quarter of a percentage point against both the euro and sterling GBPUSD, -0.15% in early trade, while the dollar index DXH5, -0.02% — which measures the greenback’s strength against a bucket of major currencies — climbed close to its September 2003 high of 95.527.
The surprise move by China’s central bank lowers both China’s benchmark one-year loan rate and the one-year deposit rate by a quarter of a percentage point to 5.35% and 2.5%, respectively.
Elsewhere, Russian markets remained in sharp focus Monday after opposition leader and outspoken critic of the government Boris Nemtsov was gunned down on a bridge next to the Kremlin late Friday.
The RUBUSD, -0.55% ruble, which has now tumbled close to 40% over the last six months against the dollar, burdened by Western sanctions and geopolitical turmoil, was trading an additional 2% lower against the dollar on Monday.
An expanded version of this report appears on WSJ.com