Tokyo (Reuters) – The safe-haven dollar fell from almost a two-decade high against major peers on Thursday, following a decline in Treasury yields, while U.S. equity futures advanced as investors assessed the economic picture.
The euro rebounded from a near two-decade low, while the commodity-linked Australian dollar rose on the strength of an increase in copper and crude oil prices.
The dollar index, which compares the US currency to six others, fell 0.22 percent to 106.82, retreating from an overnight high of 107.27, a level not seen since late 2002.
Overnight, the two-year Treasury yield, which had risen from near one-month lows to a high of 3.006 percent, fell to 2.9629 percent.
Futures contracts for the S & P 500 indicated a 0.3% increase for the U.S. stock market index at the opening bell.
The euro gained 0.25 percent, reaching $1.01845.
After hitting a two-year low of $0.67615 on Wednesday, the Australian dollar rose 0.55 percent to $0.6820 on Thursday.
Brent crude surpassed $101 and copper rose 3%.
Ray Attrill, a strategist at National Australia Bank, stated, “Risk sentiment in Asia appears to be in decent form, and U.S. rates have retreated a bit, so the conditions are favourable for the U.S. dollar to retreat from its recent highs” (OTC: NABZY).
Commodities are in better shape than they were at the beginning of the week, which is good news for commodity- and pro-cyclical currencies, and a weaker U.S. dollar is the contrast to this.
Investors are thinking about the possibility of a U.S. recession because the Federal Reserve has been raising interest rates so quickly.
The meeting minutes from June, which were released on Wednesday, showed that policymakers were worried that rising inflation could make people lose faith in the Fed’s ability to control it.
Some weak economic data has led people to think that tighter conditions are already having an effect, but overnight data showed that the number of job openings in the United States dropped less than expected in May. This shows that the job market is still tight, which could keep the Fed on the offensive.
This Friday will bring the June employment statistics for the United States. Economists surveyed by Reuters anticipate that nonfarm payrolls increased by 268,000 during the month.
The dollar was stable at 135.85 yen, maintaining around this level after retreating from a 24-year high of 137.00 yen at the end of the previous month.
According to a poll by Reuters, analysts think that the pair will still be over 130 by the end of the year. However, only 7 of the 61 people polled think it will be weaker than it is now, and 4 think it will go up to 140.
As a result of the weak dollar, sterling rose from a two-year low. This happened as British Prime Minister Boris Johnson fought to keep his job in the face of a growing rebellion within his own party.
After falling overnight to $1.1877, the British pound rose 0.25 percent to $1.19515, its lowest level since March 2020. [GBP/]
