By Ye Xie and Chris Fournier
Feb. 20 (Bloomberg) -- The dollar was headed for its biggest two-day drop against the euro since December as traders withdrew bets on the greenback.
The dollar earlier increased as much as 0.9 percent versus the euro as Citigroup Inc. and Bank of America Corp. tumbled on speculation the U.S. government may take over the banks, encouraging demand for a haven.
“It looks to be a Friday squeeze,” said Brian Dolan, chief currency strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey. “Stops were at $1.2650 to $1.2660 per euro, and they were taken out while the market dozed. Fast money is dumping dollars.”
The dollar lost 1.3 percent to $1.2838 per euro at 2:30 p.m. in New York, from $1.2674 yesterday, when it decreased 1.1 percent. It touched $1.2513 on Feb. 18, the strongest level since Nov. 21.
The dollar appreciated earlier versus most of its major counterparts as a drop in global stocks encouraged investors to take refuge in the world’s reserve currency. The greenback erased its gains at about 11:45 a.m. New York time.
‘Caught Long’
“Clearly the market was caught long on the dollar on the equity sell-off in financials,” said Steven Butler, director of foreign-exchange trading in Toronto at Scotia Capital, a unit of Canada’s third-largest bank.
Feb. 20 (Bloomberg) -- The dollar was headed for its biggest two-day drop against the euro since December as traders withdrew bets on the greenback.
The dollar earlier increased as much as 0.9 percent versus the euro as Citigroup Inc. and Bank of America Corp. tumbled on speculation the U.S. government may take over the banks, encouraging demand for a haven.
“It looks to be a Friday squeeze,” said Brian Dolan, chief currency strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey. “Stops were at $1.2650 to $1.2660 per euro, and they were taken out while the market dozed. Fast money is dumping dollars.”
The dollar lost 1.3 percent to $1.2838 per euro at 2:30 p.m. in New York, from $1.2674 yesterday, when it decreased 1.1 percent. It touched $1.2513 on Feb. 18, the strongest level since Nov. 21.
The dollar appreciated earlier versus most of its major counterparts as a drop in global stocks encouraged investors to take refuge in the world’s reserve currency. The greenback erased its gains at about 11:45 a.m. New York time.
‘Caught Long’
“Clearly the market was caught long on the dollar on the equity sell-off in financials,” said Steven Butler, director of foreign-exchange trading in Toronto at Scotia Capital, a unit of Canada’s third-largest bank.