Daily Afternoon Report 08.02.2016

The dollar extended gains against a basket of the other major currencies on Monday amid ongoing concerns over the outlook for global growth.

Market sentiment was hit amid declining oil prices as hopes faded for a deal between major producers to curb a massive supply glut.

Meanwhile, a report showing that eurozone investor confidence deteriorated sharply this month highlighted the problems in the global economy.

The Sentix index of investor morale hit a 10-month low in February, dropping from 9.6 to 6.0.

Stocks globally have had a rough start to 2016, hurt by tepid U.S. growth, falling oil prices, and concern the world faces a China-led slowdown.

The euro fell to the day’s lows, with EUR/USD down 0.59% to 1.1089.

The dollar was weaker against the yen, which tends to be bought by investors in times of risk aversion, with USD/JPY sliding 0.36% to 116.45.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.52% to 97.48.

The index ended the previous week down 2.61%, the largest weekly percentage decline since October 2011 as weak U.S. economic reports and dovish comments by a Federal Reserve official raised doubts over how much the central bank could raise interest rates this year.

But the greenback moved higher on Friday boosted by the largely upbeat U.S. employment report for January.

A pick-up in wage growth to a one-year high bolstered the outlook for inflation and increased the likelihood that the Fed could make further rate hikes in 2016.

Higher interest rates would make the dollar more attractive to yield-seeking investors.

The dollar was higher against the pound and the Swiss franc, with GBP/USD down 0.97% to 1.4362 and USD/CHF climbing 0.60% to 0.9967.

The commodity-linked currencies were mixed to higher against the greenback.

USD/CAD was trading at 1.3958. AUD/USD was down 0.23% to 0.7052 and NZD/USD slid 0.38% to 0.6601.