Dollar falls as emerging market currencies suffer

Published: 27 Jan at 8 AM Tags: Euro, Dollar,

The dollar has dropped to its lowest level since the beginning of December against its Japanese rival as investors bet on the safe haven yen. The greenback is down 0.3 per cent to 101.77 yen, a seven-week trough.

The dollar has been hit by a sell-off of emerging market currencies. Argentine and Turkish currencies were binned last week leading to fears that there could be a looming financial crisis. In Argentina last week the peso lost support on the open market and Turkey has been hit by political concerns.

Analysts are also concerned that funds could be shifted back to the US as the Federal Reserve tightens its monetary policy. The central bank’s money printing programme previously meant that cheap money was flooding into the emerging markets.

The Swiss franc, which like the yen is regarded as a safe haven currency, is hovering close to a one-month high against the euro, which is currently worth 1.2234 francs.

There has been little movement by the euro against the greenback. The single currency remains close to a three-week high against the dollar at $1.3685. The Swiss frank is close to its highest level in a month against the dollar trading at 0.8941 francs per dollar.