Dollar skids to 2-month trough on Brexit optimism

The US dollar fell against a basket of major currencies on Thursday, to deepen its losses for the third consecutive day, and slide to 2-month low, as demand accelerated on Euro and Sterling, after positive news about the UK exit from the European Union have spurred investors sentiment.

The dollar index fell by 0.5% to 97.50 points (its lowest level since August 23rd), from the opening of 97.99, with an intraday high of 98.11.

The US dollar shed 0.3% yesterday, in its second daily loss in a row, due to sell-off continuing in favor of most major currencies.

Demand accelerated on the European currencies euro and sterling against the dollar on Thursday, as investors shifted after positive news about a final Brexit deal boosted market sentiment.

The European Commission President, Jean-Claude Juncker, announced today a final agreement on the UK departure from the European Union, after the intensive talks last night, which comes ahead of EU leaders summit in Brussels later today.

British Prime Minister Boris Johnson confirmed that a draft deal has been made and will be presented to EU leaders at their summit on Thursday and Friday, and to the British parliament on Saturday.

Investors are anticipating major economic data in the US later today, with the monthly reading of the industrial production for September, which is a major indicator that accounts for about 25% of the economic strength, while in case of weak data the US dollar will deepen its losses further. 

At 13:15 GMT, the US economy is due to release its monthly reading for industrial production, with forecasts of a contraction by 0.1% in September vs. growth by 0.6% in August, and the capacity utilization rate expected to fall to 77.7% vs. 77.9% in the previous reading.