Home / Stock Market News / Daily Currencies Ratings / Dollar slides toward monthly loss as Fed bets ease

Dollar slides toward monthly loss as Fed bets ease

The dollar was under pressure in Asia on Monday and was headed for its first monthly drop in five months as investors have scaled back bets that rising U.S. rates will spur further gains and as fears of a global recession have receded a little.

The week ahead is full of data that could provide clues on the outlook for global growth, U.S. interest rates and the dollar with Chinese Purchasing Managers’ Index figures, U.S. jobs numbers and growth data in resource bellwether Australia.

Trade was likely to be light through Monday as U.S. stock and bond markets close for the Memorial Day public holiday.

In Asia trade the dollar was a fraction weaker on the euro EUR=EBS at $1.0746, just above a five-week low, having dropped about 1.5% on the common currency last week.

The risk-sensitive Australian and New Zealand dollars extended a Friday rally to touch three-week highs, while the yen JPY=EBS was steady at 126.98 per dollar.

The Aussie AUD=D3 rose as far as 0.4% to $0.7189, and the kiwi NZD=D3 0.3% to $0.6556.

“The U.S. dollar can fall further this week. Were it not for China’s lockdown, the global outlook would be brighter, and the dollar lower,” said Joe Capurso, head of international economics at the Commonwealth Bank of Australia in Sydney.

Decent growth outside the United States tends to favour exporters’ currencies at the dollar’s expense.

The dollar index =USD, which hit a two-decade high of 105.010 earlier in May dipped about 0.2% to 101.430 on Monday. Sterling GBP=D3 held last week’s gains at $1.2649.

Norway’s crown NOK= and the Canadian dollar CAD=D3 have hit multi-week highs, having gained along with oil prices as China’s easing lockdowns and the U.S. driving season stoked demand and as Europe debates an embargo on Russian crude. O/R

Reopening hopes also lifted China’s yuan CNY=CFXS to a one-week high of 6.6445 per dollar on Monday. CNY/

Shanghai said on Sunday “unreasonable” curbs on businesses will be removed from June 1, while Beijing reopened parts of its public transport as well as some malls.

Most analysts are wary of calling an outright end to the recent dollar strength.

However, investors have lately seized on hints the Federal Reserve, once it has hiked aggressively over the next two months, might then take a breather.

“The Fed has stopped short of validating calls for even more tightening, leading to a plateau in forward expectations,” said NatWest Markets’ global head of desk strategy, John Briggs.

Emerging market currencies have climbed in relief and in Asia, the Taiwan dollar TWD=TP, Singapore dollar SGD=D3, Malaysian ringgit MYR=MY, Thai baht THB=TH and Indonesian rupiah IDR=ID all hit their highest for weeks. EMRG/FRX

The beaten-down South Korean won KRW=KFTC jumped through its 50-day moving average. The Colombian peso COP= hovered near last week’s one-month high as traders viewed momentum of businessman Rodolfo Hernandez’s run for president as market friendly, with a run-off vote due on June 19.

Cryptocurrencies attempted a bounce but bitcoin BTC=BTSP, which rose 3%, is still pinned around $30,000.
Source: Reuters

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping