On Monday morning in Asia, the dollar fell, beginning the week around a 20-year high. However, investors are moving to the U.S. dollar due to concerns about global growth, while cryptocurrency markets look to find some stability after a week of volatility.
The U.S. Dollar Index, which measures the greenback versus a basket of other currencies, declined 0.02 percent to 104.38 as of 11:42 p.m. Eastern Time (ET) (3:42 AM GMT).The index momentarily surpassed 105 on Friday, its highest level since December 2002, after six consecutive weeks of advances.
The USD/JPY exchange rate decreased 0.23 percent to 128.89.
AUD/USD plummeted 0.86 percent to 0.6879, while NZD/USD lost 0.72 percent to 0.6237.
The USD/CNY currency pair climbed 0.06 percent to 6.7934.Fixed asset investment was up 6.8 percent year-over-year, industrial output was down 2.9% year-over-year, Chinese industrial production increased 4% year-over-year, and retail sales decreased 11.1% year-over-year in April 2022, according to statistics provided earlier in the day.The unemployment rate in China was at 6.1%.
The GBP/USD exchange rate declined 0.20 percent to 1.2236.
Investors have rushed to the U.S. dollar out of fear about the Federal Reserve’s capacity to control inflation without triggering a recession. However, concerns about slowing GDP due to the conflict in Ukraine and the economic effect of China’s lockdowns to contain its most recent COVID-19 epidemic linger.
In a note, Barclays analysts said, “Global economic worries are bolstering broad dollar gains.”
Events to watch this week include U.S. retail and production figures expected on Tuesday, as well as public statements from numerous Fed members. “The emphasis will be on any possible reiteration/pushback on the premise that 75-basis point rate rises are off the table for now, “the letter stated.”
Markets are pricing in 50 basis point rises at the Fed’s next two meetings, according to CME’s Fedwatch tool. However, the chance of higher prices exists.
The poor Chinese data was also in investors’ thoughts.
According to the Barclays research, “A lower economic forecast in China is expected to keep commodities and G10 currencies under pressure and the dollar strengthened,” according to the Barclays research.
The euro began the week around its lowest level since early 2017, owing to the strong dollar and the European economy’s vulnerability to the conflict in Ukraine that was caused by the Russian invasion on Feb. 24. Top European Central Bank officials are also set to speak throughout the week.
In Asia-Pacific, the Japanese yen was a touch lower on Monday morning at 129.43 yen per dollar. It achieved its first week of advances since early March 2022 during the previous week. Concerns about an economic slump meant U.S. Treasury rates slowed their recent surge. As rates stay low in Japan, the yen is sensitive to increased U.S. yields.
Cryptocurrencies enjoyed a peaceful weekend following the previous week’s turbulence triggered by TerraUSD, a so-called stablecoin, losing its dollar anchor. Bitcoin was trading around the $31,000 level after sliding below $21,400 on Thursday, its lowest since December 2020.
