US Dollar crashes today: Why is USD down against other currencies?

USD dollar weakened against major currencies including the euro and yen on Monday. The euro was last up 0.64 per cent against the dollar at $1.1213. Against the Japanese yen, the dollar weakened 0.41 per cent to 157.89. Sterling rose 0.60 per cent to $1.34290. The dollar index, which measures the currency against six major rivals, dipped 0.47 per cent to 101.75.

In the bond market, Treasury yields held relatively steady following big moves last week. The yield on the 10-year Treasury inched up to 4.87 per cent from 4.86 per cent late Friday. The fall in oil prices helped to ease worries about inflation that have weighed on economies across the globe this year.

International Oil Prices


Brent crude futures fell $5.75, or 5.85 per cent, to settle at $92.57 a barrel, and prices continued falling after settlement, while US West Texas Intermediate futures dropped $3.98, or 4.38 per cent, to $86.85.

Efforts to end the Iran war have gathered pace following last week's US midterm elections in which Democrats won control of Congress. US President Donald Trump on Sunday said that he was highly unlikely to order fresh attacks on Iran as long as talks to end the war progressed, even though both countries reported that shipping had been hit in or near the Strait of Hormuz.

US Bond Market

The yield on the 10-year Treasury remains well below a peak above 5.30% that it reached last month, when it touched its highest level in two decades on worries about high inflation and the U.S. government’s big debt, among other things. The pullback in Treasury yields over the last month has helped rates for mortgages and other kinds of loans to ease. It also gave a boost to prices for stocks and other investments.

Sentiment improved after US President Donald Trump said on Sunday he was highly unlikely to order fresh attacks on Iran as long as diplomatic efforts continued. Trump is due to meet Qatar's Sheikh Mohammed bin Abdulrahman Al-Thani on Monday as efforts to secure an end to the conflict gather pace.

The improved mood in markets also weighed on the safe-haven dollar, while Brent crude futures fell nearly 6 per cent to settle at $92.57 a barrel.

The risk-sensitive Australian and New Zealand dollars also rallied. The Aussie rose 0.95 per cent to $0.6922 and New Zealand's kiwi jumped 1.54 per cent to $0.56301, with traders also weighing the implications of too-close-to-call weekend elections in New Zealand.