Dollar weakens while yen rises
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Dollar weakens yen at October highs after U.S. stocks slide
The U.S. dollar, usually seen as a safe haven in turbulent times, surprised some currency strategists on Thursday by losing ground after spooked investors drove U.S. stocks to their worst fall in nearly eight months.
The VIX (VIX), Wall Street's "fear index" measuring the stock market's expectation of volatility, rose by 44 percent to 22.96 on Thursday, its highest level since April.
The dollar index (DXY), a gauge of its value against six major currencies, fell 0.31 percent to 95.21 on Thursday, after hitting a high of 95.79 in the previous session.
The safe-haven yen strengthened to 112.13 against the dollar, its highest level this month, taking heart from risk aversion in the wake of warnings from the IMF over global growth and financial stability.
Expectations of hawkish rate rises may have been at work on Wednesday when sellers sent the Nasdaq (NDX) to close at 7044.49, its lowest level since early July.
The S&P 500 (SPX) and Dow Jones Industrial Average (DJI) weren't too far behind, both falling more than 3 percent.
Benchmark 10-year yields (US10YT=RR) cooled off from a seven-year high of 3.261 percent hit on Tuesday to 3.1516 percent.
The euro (EUR=) rose 0.35 percent to 1.1566 on Thursday after hitting a low of 1.1477 in the previous session.
EU Brexit negotiator Michel Barnier said on Wednesday the parties had agreed on much of the withdrawal agreement ahead of a summit of the bloc's 28 national leaders next week.
But the euro's gains are likely to be limited with markets worried about the sustainability of Italy's public finances, despite Italian Economy Minister Giovanni Tria stating that the government would do everything in its power to regain the confidence of financial markets.
Sterling traded at $1.3228, its highest in a week, as investors bet on an orderly British departure from the EU in March.
The pound has gained more than 2 percent versus the dollar over the last five trading sessions.
The Canadian Dollar was changing hands at 1.3048, not far off its October low of 1.3069 versus the dollar hit on Wednesday.
The Australian dollar , often viewed as a gauge of global risk appetite, traded at 0.7078, up 0.25 percent on Thursday.
The New Zealand's dollar traded at 0.6476, above its multiyear low of 0.6422 seen on Monday.
Gold traded relatively flat at $1,193 below the psychological $1,200 level.