SINGAPORE (Reuters) – The U.S. dollar slipped on Monday as investors continued to come under selling pressure, reducing bets on further gains in the greenback on rising U.S. interest rates, while beginning to hope that China’s easing of lockdowns would help global growth and exporter currencies .
U.S. stock futures rallied sharply during the Asian session and pulled the region’s risk-sensitive currencies along, despite volatility in Asian stocks. [MKTS/GLOB]
It was up 0.5% at $0.7091 and was up 3.8% in a week and a half. It rose 0.8% to $0.6458, a three-week high. [AUD/]
“It’s been a pretty positive start to the week,” said Ray Attrill, head of foreign exchange strategy at National Australia Bank (OTC: ).
“The dollar looks to be losing its upward momentum right now,” he said, tracking a small rally in U.S. bonds that have pushed yields lower in recent sessions. [US/]
The euro and yen rose, with the yen up 0.4% to 127.35 against the dollar and the euro up 0.2% to $1.0586 after gaining 1.5% last week.
In the 12 months to mid-May, the index rose about 16% to a 20-year high and fell about 0.23% to 102.680, down about 2% in a week.
The safe-haven Swiss franc also rose, maintaining last week’s sharp gains – the highest since March 2020 – when it climbed from around 0.9716 per dollar against the greenback.
“The dollar may be peaking given Europe’s resilience to energy shocks and possible easing of lockdowns in China,” said Commonwealth Bank of Australia (OTC:) strategist Joe Capurso.
“Given the type of policy support, we expect investment to rebound faster than consumer spending,” he said. “Investment in mining commodity-intensive[hence]is very good for commodity currencies like AUD and CAD, with the exception of the Chinese yuan.”
Shanghai is gradually easing its lockdown, and China’s unexpectedly sharp rate cut last week has been seen as a signal that the authorities will support the recovery.
The city of 25 million is expected to lift a citywide lockdown and return to more normal life from June 1.
The yuan had its best week since late 2020 last week, firming at 6.6844 on Monday. [CNY/]
The Canadian dollar rose for a third straight week last week, rising about 0.4 percent to C$1.2800 per U.S. dollar on Monday. [CAD/]
Sterling gained nearly 2% last week on stronger-than-expected retail sales data and a broader rethinking of whether global central banks are really far behind the Fed. It was last up 0.4 percent at $1.2546. [GBP/]
Geopolitics came into focus in Asia this week as U.S. President Joe Biden visited the region, promoting greater U.S. economic engagement and an attempt to counter Chinese influence.
He met Japanese Prime Minister Fumio Kishida on Monday, ahead of meetings this week with leaders of India and Australia in Tokyo.
Australia elected a new government on Saturday despite a muted market reaction as opinion polls predict a victory for the centre-left Labour Party and no change in the direction or pace of interest rate hikes is expected.
The Reserve Bank of New Zealand is expected to raise its benchmark cash rate by 50 basis points on Wednesday. The minutes of the Fed meeting will also be released on Wednesday.
Currency bid price at 0454 GMT
Description RIC Last US Close Percent Change YTD Pct High Bid Low Bid
$1.0590 $1.0569 +0.21% +0.00% +1.0595 +1.0559
127.4050 127.9100 -0.45% +0.00% +128.0500 +127.2900
134.94 135.03 -0.07% +0.00% +135.4900 +134.6700
0.9717 0.9743 -0.26% +0.00% +0.9751 +0.9713
1.2545 1.2496 +0.40% +0.00% +1.2553 +1.2482
1.2801 1.2846 -0.36% +0.00% +1.2842 +1.2794
0.7090 0.7052 +0.54% +0.00% +0.7098 +0.7046
USD/USD 0.6455 0.6410 +0.73% +0.00% +0.6467 +0.6400
Tokyo foreign exchange market information from the Bank of Japan