(Adds new comment, FX table, byline, NEW YORK dateline, updates prices)
- China's yuan falls to one-year low vs dollar
- Aussies dollar weakens broadly
- Euro gains, triggered earlier by Macron victory, fade
The U.S. dollar struck a two-year high on Monday as a wave of risk aversion hit global markets, while the Chinese yuan was set for its biggest three-day losing streak in nearly four years on growing worries of an economic slowdown in China.
With war in Ukraine entering a third month and growing concerns of a China-wide COVID-19 outbreak sparking a rout in Chinese stocks, investors dumped currency market darlings like the Australian dollar and the offshore Chinese yuan CNH=D3 .
Against a basket of its rivals =USD , the dollar gained 0.6% to 101.75, a level it last tested in March 2020.
"This dollar dominance can only be explained by the fears of COVID continuing to influence China's lack of activity," said Juan Perez, director of trading at Monex USA in Washington.
"Chinese data has been OK, supposedly, per economic figures, but there is growing concern that the No-COVID or zero-COVID measures are creating the need to revise outlooks further downward. China's shutdowns are killing global optimism," he added.
China's yuan CNY=CFXS fell to a one-year low against the dollar and was last down 0.9% at 6.4575 yuan per U.S. dollar.
The Aussie, which was one of the biggest gainers in currencies in the first quarter of 2022 thanks to surging commodity prices, fell widely. It dropped 1.5% against the U.S. dollar to US$0.7138 AUD=D3 and fell 2.1% versus the Japanese yen AUDJPY=EBS .
The Norwegian crown also fell nearly 2% versus the U.S. dollar, which last traded up at 9.1235. NOK=D3 Broader currency market volatility gauges ticked higher .DBCVIX , with an index rising to its highest levels in more than a month.
BofA Securities strategists said that despite the pickup in currency market volatility, investors were long the Canadian dollar, Aussie, and euro.
The euro's tiny gains after French President Emmanuel Macron's comfortable election victory over far-right rival Marine Le Pen quickly dissipated, with the single currency EUR=EBS down 0.9% at $1.0716, against a resurgent dollar.
Latest positioning data for last week showed hedge funds trimmed their long euro bets. EURNETUSD= Hawkish comments by various policymakers last week also raised the risks of aggressive policy tightening by global central banks. Money markets expect the U.S. Federal Reserve to raise interest rates by a half point at the next two meetings and the European Central Bank to raise interest rates by 25 basis points in July. FEDWATCH ECBWATCH
======================================================== Currency bid prices at 10:18AM (1418 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 101.6600 101.0800 +0.59% 6.269% +101.7500 +101.0500 Euro/Dollar EUR=EBS $1.0718 $1.0810 -0.84% -5.72% +$1.0852 +$1.0707 Dollar/Yen JPY=EBS 127.7000 128.5000 -0.62% +10.93% +128.8550 +127.6100 Euro/Yen EURJPY= 136.86 138.78 -1.38% +5.03% +139.1900 +136.8600 Dollar/Swiss CHF=EBS 0.9562 0.9565 -0.03% +4.83% +0.9597 +0.9548 Sterling/Dollar GBP=D3 $1.2723 $1.2840 -0.91% -5.93% +$1.2880 +$1.2706 Dollar/Canadian CAD=D3 1.2763 1.2711 +0.42% +0.95% +1.2769 +1.2707 Aussie/Dollar AUD=D3 $0.7142 $0.7244 -1.40% -1.74% +$0.7268 +$0.7135 Euro/Swiss EURCHF= 1.0247 1.0333 -0.83% -1.18% +1.0347 +1.0245 Euro/Sterling EURGBP= 0.8423 0.8410 +0.15% +0.27% +0.8441 +0.8398 NZ NZD=D3 $0.6595 $0.6635 -0.59% -3.64% +$0.6635 +$0.6584 Dollar/DollarDollar/Norway NOK=D3 9.1360 8.9595 +1.89% +3.63% +9.1360 +8.9450 Euro/Norway EURNOK= 9.7933 9.6683 +1.29% -2.19% +9.7966 +9.6594 Dollar/Sweden SEK= 9.6901 9.5245 +0.90% +7.45% +9.6923 +9.5142 Euro/Sweden EURSEK= 10.3855 10.2933 +0.90% +1.48% +10.3890 +10.2954 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5EFX positions https://tmsnrt.rs/3rQdVMK
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