The Dollar Retreats From a 9-month High
Despite the continued spread of the Delta coronavirus type, the safe-haven dollar fell from more-than-nine-month highs against key peers on Monday, as a rebound in Asian stocks lifted the mood.
The dollar index, which measures the currency against six rivals, fell 0.19 percent to 93.311 on Monday. This was after reaching a high of 93.734 on Friday for the first time since November 4. The decision came as equities recovered across the region. Base metals prices rising on expectations of improved demand after China, the world’s largest metals user, reported no new locally transmitted COVID-19 cases for the first time since July. Wall Street’s better finish on Friday bolstered enthusiasm as well.
Following significant drops last week, commodity-linked currencies such as the Australian and Canadian dollars led the recovery versus the US dollar. After touching a nine-and-a-half-month low of $0.71065 on Friday, the Australian dollar climbed 0.29 percent to $0.71575.
The US dollar fell 0.25 percent against the Canadian dollar to C$1.2776. At the end of last week, it reached an eight-month high of C$1.2949. Bitcoin, the leading cryptocurrency, surpassed $50,000 for the first time since mid-May. It was the last, trading 2.06 percent higher at $50,333.24.
Delta variant threatens
This month, the dollar has benefited from a flight to safety as a surge in the rapidly spreading Delta variant threatens to derail a global economic recovery.
COVID- The Fed shifted its annual Jackson Hole, Wyoming conference to an online format. It will take place this Friday, prompting doubts about the central bank’s more significant evaluation of the Delta variant’s economic impact.
Fed Chair Jerome Powell delivers a speech on the economic outlook at the event, which will be closely scrutinized by traders looking for insights on the timing and speed of monetary policy tightening.
Currency
The New Zealand kiwi remained flat at $0.68385, close to the nine-and-a-half-month low of $0.6807 recorded on Friday, with the country under lockdown due to a Delta epidemic. Meanwhile, over 60% of Australia’s 25 million population is under lockdown, with infection rates at an all-time high.
South Korea and Vietnam have also increased or tightened restrictions. Meanwhile, Japan changed policy by tripling COVID-19 tests as daily new infections reached an all-time high on Friday. Another haven, the yen, was practically steady at 109.85 per dollar. It stabilized in the middle of its trading range over the previous month and a half.
The euro rose 0.18 percent to $1.17195, up from a nine 1/2-month low of $1.1664.
Sterling rose 0.18 percent to $1.36475, up from $1.3602 at the end of last week.
