On Tuesday morning in Asia, the dollar went up because people wanted to buy safety and because they thought the U.S. Federal Reserve would keep raising rates quickly.
The US Dollar Index, which measures the value of the dollar against a basket of other currencies, was up 0.38 percent to 108.43 (0516 GMT) at 1:16 a.m. ET.
The USD/JPY pair fell 0.06 percent to 137.34.The Bank of Japan is still committed to giving the economy a lot of extra help.
The AUD/USD pair fell by 0.14 percent to 0.6721, getting closer to Monday’s two-year low of $0.6716, which was caused by a drop in commodity prices and new COVID restrictions from China.
The NZD/USD exchange rate fell 0.09 percent to 0.6105.
The GBP/USD exchange rate fell 0.24 percent to 1.1861, while the USD/CNY exchange rate rose 0.27 percent to 6.7363.
“The dollar really got stronger everywhere,” said Carol Kong, a currency strategist at the Commonwealth Bank of Australia. “This is a continuation of the trend we’ve been seeing lately, which is that people are worried about a global recession.”
At the same time, she said, Fed policymakers will be “laser-focused” on high inflation, so they’ll keep raising rates even though fears of a recession are growing.
“I think it’s possible that the euro and the dollar could reach the same value as soon as this week.”
The markets are worried about a possible shortage of energy because the Nord Stream 1 pipeline, which is the largest single pipeline that brings Russian gas to Germany, started its annual maintenance on Monday and is expected to stop moving gas for 10 days. But because of the war in Ukraine, the markets are worried that Russia might keep the ports closed for longer.
Investors also look to the U.S. Consumer Price Index (CPI) for more information about how the U.S. Federal Reserve will handle its monetary policy.
Raphael Bostic, President of the Fed Bank of Atlanta, said that the U.S. economy can handle higher interest rates, and he also said that he still wants to see another interest rate hike this month.
In Asia-Pacific, investors are worried about another lockdown because the highly contagious BA.5 omicron sub-variant has been found in more than one city.
