LIVE MARKETS-Sympathy for the dollar

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SYMPATHY FOR THE DOLLAR

Spare a thought for the dollar. It's tumbled to 11-year lows against the Swiss franc, near-five year lows against the euro and the pound, three-year lows against the Australian dollar and even lost out to the Japanese yen - thanks in large part to talk of the first bout of joint Japanese-U.S. official intervention in 15 years.

Investors were already pretty lukewarm towards the dollar, given the dizzying newsflow since the start of the year, as President Donald Trump has threatened a fresh round of tariffs on Europe and South Korea, an effective trade embargo on Canada, threatened to take Greenland by force - only to row back on that last week - and captured the president of Venezuela.

The dollar index, which fell by almost 10% last year, has lost almost 3% in value so far this year, putting on course for its worst performance in the first five years since 2018, according to Reuters calculations.

Trump said on Tuesday the value of the dollar was "great", when asked whether he thought it had declined too much. Traders took this initially as a signal to sell the dollar even more aggressively. With the Federal Reserve set to deliver its decision on interest rates in a matter of hours, some of that action has calmed down.

But options traders have turned more bearish towards the dollar than they have done in almost a year. They're willing to pay a bigger premium to own options that give them the right to buy the euro (and sell the dollar) than to own derivatives to sell it than at any time since last April.

(Amanda Cooper)

FOR EARLIER LIVE MARKETS POSTS:

EURO STRENGTH IS BACK, WHAT IT MEANS FOR EUROPE INC CLICK HERE

TECH UP, LUXURY DOWN CLICK HERE

BEFORE THE BELL: LOTS OF NEWS TO READ, START WITH ASML CLICK HERE

MORNING BID: TRUMP'S TALK DOWNS THE DOLLAR CLICK HERE