The US dollar fell against most major and emerging-market counterparts on Tuesday, hitting its lowest point since September.
On the other hand, euro climbed 0.49 percent to 1.2065, which represents its highest level since September 8. The euro rose 14 percent against the dollar in 2017, its best performance since 2003.
“The backdrop for the dollar is just not very good. The global reflation trade is progressing along and the backdrop is that we’re rotating into a regime shift and that comes with a changing backdrop for capital flows,” said Mark McCormick, head of FX strategy for North America for Toronto Dominion Bank.
Gold hits three-month high
The weaker dollar helped lift gold by more than 13 percent in 2017, and during Tuesday’s trading session gold was trading above $1308.
“As global complacency over the trajectory of U.S. rates continues to be astoundingly low, precious metals in general should continue to benefit. The old adage that the market can stay irrational longer than you can stay solvent appears to be alive and well in the gold market at the moment,” said Jeffrey Halley, senior market analyst at Oanda Corp. in Singapore.
Gold is likely to remain supported, with prices potentially rising towards $1320 this week. The precious metal is boosted by a weakened dollar and political tensions around the world, 2017 was its best year since 2010.
Despite the popularity of cryptocurrencies such as bitcoin, analysts expect the safe-haven asset to continue adding on last year’s 14 percent gain.
European stocks slide
European stocks started 2018 in the red, with automobile stocks and miners among the biggest decliners.
The pan-European STOXX 600 index fell 0.49 lower, London’s FTSE 100 Index was down by 0.31 percent, while Frankfurt’s DAX was down by 1 percent.