Connect with us

News

Dollar Rises as China COVID fears Spook Markets

Published

on

Dollar Rises as China COVID fears Spook Markets

(CTN News) – On Monday, the U.S. dollar gained ground against the majority of other major currencies as further COVID-19 restrictions in China fueled concerns about the future of the world economy and caused traders to steer clear of riskier currencies.

On Monday, the Chinese capital issued a serious COVID-19 pandemic warning, closing businesses and schools in affected areas and tightening entry regulations as infection rates increased locally and nationally.

The latest cases have dashed hopes that the government will soon loosen its tight regulations. This has increased the dollar’s value, which is seen as a shelter during stressful times.

Euro/dollar exchange rate dropped by 0.86% to $1.0235.

To reach 142.085 yen, the dollar gained 1.2% versus the Japanese yen, edging closer to its biggest one-day gain since September 6. Euro/dollar exchange rate dropped by 0.86% to $1.0235.

“Presently, all eyes are on China and its COVID Zero strategy. Traders are concerned that China may tighten its limitations, which might impede development and raise the risk of inflation, “said John Doyle, Monex USA’s vice president of dealing and trading.

Doyle said that “the concern is prevalent across asset classes.”The onshore yuan of China started at 7.1451 to the dollar before falling to a low of 7.1708, the weakest level since November 11.

The Australian dollar, a liquid indicator for risk appetite, fell 1.1% to a more than 1-week low of $0.66 as investors became weary of riskier currencies.

The dollar gained more support when Federal Reserve Bank of San Francisco President Mary Daly said on Monday that even while she did not anticipate that result from monetary policy, the U.S. central bank might raise its overnight target rate beyond 5% if inflation does not slow down.

Analysts also attributed a portion of the dollar’s resilience to recovering from the recent severe selloff that caused the Dollar Index to decline by as much as 4.7% in November.

Kit Juckes, the chief FX strategist at Societe Generale, said: “I see the dollar’s rise this morning as a reflection of previous weakness rather than as an indication that anything is changing.”

Investors’ optimism that the Federal Reserve’s dollar-boosting interest rate rises may be poised to be slowed was stoked by lower-than-expected U.S. inflation figures. Trading has already been taking gains on long dollar bets due to it.

Calculations by Reuters and data from the Commodity Futures Trading Commission published on Friday show that speculators’ bets on the U.S. dollar have changed to a net short position for the first time in more than a year.

The dollar index has gained 12% or thereabouts so far this year.

The Fed’s November meeting minutes, which are scheduled to be issued on Wednesday, will be carefully scrutinized by investors for any clues regarding the direction of interest rates.

Sterling suffered on Monday due to a stronger dollar, falling 0.5% to $1.18225 against the greenback as investors braced for further pound weakness ahead of public finances data due on Tuesday and flash PMI numbers on Wednesday.

Throughout the rest of the session, cryptocurrencies were still under pressure, with bitcoin falling about 3% to $15,740 after hitting a 2-year low of $ 15,588 earlier.

The well-publicized failure of the cryptocurrency exchange FTX, which, according to bankruptcy filings, owes its 50 largest creditors a combined total of nearly $3.1 billion, has left the sector in shambles, has caused further damage.

Related CTN News:

UK Oil and Gas Sector faces 24 Billion Pounds, Bill, to Plug Old Wells – report

Continue Reading

Recent News

Volunteering at Soi Dog

Learn Spanish Now

Learn Spanish


Buy FIFA Coins

cheap fifa coins