LONDON (ShareCast) - (Sharecast News) - Sterling reeled against the Greenback at the start of the week as the US dollar spot index jumped to its loftiest level since May 2017.
As of 2058 GMT, the US dollar spot index was jumping 0.66% to 97.5470 and trading just off a fresh 52-week high hit earlier in the session, while cable was down by 0.86% at 1.28580.

Versus the single currency on the other hand, the pound was off by just 0.06% to 1.1438, despite reports that the Prime Minister was forced to call off an emergency Cabinet meeting, on Monday, to approve a deal with Brussels, on the heels of continued disagreement among MPs over the Irish backstop.

In a curious symmetry, the euro was falling by an almost identical -0.86% to 1.12395, with investors possibly nervous ahead of the deadline, on Tuesday, for Italy to respond to Brussels's request for it to present an ammended budget.

Weakness in the euro also came alongside talk in markets of continued outflows from risk assets in Europe.

According to analysts at Bank of America-Merrill Lynch, risk assets in Europe saw further outflows last week, as investors sought "safety" by heading into money market funds.

"The lack of yield in Europe vs. the US, and the diverging economic macro cycles between the two regions is something to blame for this exodus from European risk assets," they explained.

Somewhat curiously too, dollar/yen was little changed, trading down by just -0.01% to 113.786.

Emerging market currencies meanwhile were under pressure, with the US dollar rising 1.12% to 20.3609 versus the Mexican peso, by 0.95% to 3.7653 against the Brazilian real and by 0.40% to 35.5495 in its cross with the Argentine peso.

The Russian rouble on the other hand surprised to the upside, with the US dollar down by 0.08% to 67.9012 after the US Treasury extended a deadline for bilionaire Oleg Deripaska to give up control of Rusal, which would forestall sanctions against the company.

An earlier bounce in crude oil futures - which had since evaporated - also provided a boost, sending the rouble higher by roughly 1.0% at the start of the session.

As an aside, during the previous week leveraged funds had reportedly increased their net short positions against the currency to a record, in part amid talk, in the wake of the US midterm elections, that Washington was set to levy new sanctions on Moscow.

Over prior weeks and months some US officials had already been saying as much.

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