Dollar firms, yen gains amid selloff, Brexit worries

The dollar gained ground on Wednesday as a decline in the stock market prompted a sell-off of risky currencies. Meanwhile, worries about the EU-UK post-Brexit talks pushed the pound to a new six-week low.

The dollar index bounced nearly 2%, while the safe-haven yen rose to a one-week peak of 105.83 on the dollar.

In Asian trade, the greenback was mostly steady. The risk-sensitive Aussie rose 0.2% to $0.7226, while the kiwi steadied at $0.6621.

The pound fell under pressure on growing fears that Britain is going to undersell its Brexit treaty. It lost 0.2% to $1.2950, its lowest since end-July, and hit a six-week low of 90.57 pence on the euro.

A slump in fuel prices also weighed on oil exporters’ currencies. The Norwegian krone fell to a more than six-week low of $9.1840. The Canadian dollar also slumped to a three-week low but steadied in Asian trade. 

The euro steadied ahead of the ECB’s meeting on Thursday. The single currency lost 2% since hitting a 28-month high above $1.20 on Sept. 1. It stood at $1.1772.