© Reuters. FILE PHOTO: An employee at a teller holds a stack of US dollar banknotes before giving them to a customer in Jakarta, October 8, 2015. REUTERS/Biwayharta
Written by Tom Westbrook
SINGAPORE (Reuters) – The dollar fell on Monday as investors continued to sell pressure, lowering bets on further dollar gains from higher U.S. interest rates, on optimism that easing the lockdown in China could help global growth and exporters’ currencies.
US stock futures rebounded sharply in the Asian trading session, attracting risk-sensitive currencies in the region along the way, even as stock markets in Asia fluctuated. [MKTS/GLOB]
It rose 0.5% to $0.7091 and rose 3.8% in a week and a half. It rose 0.8% to $0.6458, its highest level in three weeks. [AUD/]
“It’s a reasonably positive start to the week,” said Ray Atrell, head of foreign exchange strategy at National Australia Bank.
“The US dollar appears to be losing bullish momentum at the moment,” he said, tracking a slight rally in US bonds that has lowered yields in recent sessions. [US/]
The euro and the yen rose, with the Japanese currency gaining 0.4% to 127.35 against the dollar, and the euro adding 0.2% to $1.0586 after last week’s 1.5% gain against the dollar.
It rose nearly 16% to a two-decade high in the 12 months to mid-May, fell by about 0.23% to 102.680 and lost nearly 2% in a week.
The safe-haven Swiss franc also rose, maintaining sharp gains made last week – its best levels since March 2020 – when it jumped from parity on the dollar to around 0.9716 against the dollar.
“The dollar may be on its way to a peak, given Europe’s resilience to the energy shock and potential easing of lockdowns in China,” said Joe Caporso, strategist at the Commonwealth Bank of Australia.
“Given the type of policy support, we expect investment to rebound faster than consumer spending,” he said. “Investment in commodity-intensive mining (and therefore) is very positive for commodity currencies such as the Australian and Canadian dollars, as well as the yuan.”
Shanghai is out of lockdown, and the unexpectedly large interest rate cut in China last week has taken a signal that the authorities will lend support to the recovery.
The city of 25 million people expects to lift the citywide lockdown and return to normal life further from June 1.
The yuan had its best week since late 2020 last week, rising to 6.6844 per dollar on Monday. [CNY/]
The Canadian dollar rose for the third consecutive week last week and rose about 0.4% to C$1.2800 per dollar on Monday. [CAD/]
Sterling jumped nearly 2% last week on the back of stronger-than-expected retail data and a broader market rethink on whether global central banks lag far behind the Federal Reserve. The latest rise was 0.4% at $1.2546. [GBP/]
Geopolitics is in focus in Asia this week as US President Joe Biden tours the region, promoting greater US economic involvement and seeking to fend off China’s influence.
He met Japanese Prime Minister Fumio Kishida on Monday ahead of meetings with the leaders of India and Australia in Tokyo this week.
Australia elected a new government on Saturday, although the market reaction was muted with polls predicting a victory for the centre-left Labor Party and not expected to change the direction or pace of interest rate hikes.
The Reserve Bank of New Zealand is expected to raise the benchmark cash rate by 50 basis points on Wednesday. The minutes of the US Federal Reserve meeting are also scheduled for release on Wednesday.
================================================== == ======
Currency display prices at 0454 GMT
Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid
1.0590 USD 1.0569 + 0.21% + 0.00% +1.0595 +1.0559 USD
dollar / yen
127.4050 127.9100 -0.45% + 0.00% +128.0500 +127.2900
euro / yen
134.94135.03 -0.07% + 0.00% +135.4900 +134.6700
dollar / swiss
0.9717 0.9743 -0.26% + 0.00% +0.9751 +0.9713
Pound sterling / dollar
1.2545 1.2496 + 0.40% + 0.00% +1.2553 +1.2482
1.2801 1.2846 -0.36% + 0.00% +1.2842 +1.2794
Australian / dollar
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
locations in Tokyo
spots in europe
Tokyo forex market information from the Bank of Japan