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- Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
The safe-haven U.S. dollar bounced on Monday while commodity-sensitive currencies including the Australian dollar tumbled after a new batch of disappointing Chinese data bolstered global recession worries.
Chinese industrial output, retail sales and fixed-asset investment all fell short of analyst estimates in data published on Monday, as a nascent recovery from draconian COVID-19 lockdowns faltered.
Commodities including iron ore slumped on concerns about reduced demand from China, which hurt currencies exposed to the assets, including the Australian dollar.
“Concern about Chinese demand for commodities...at the margins it's probably encouraging a risk off attitude,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
The U.S. dollar index =USD gained 0.79% to 106.52. The euro EUR=EBS eased 0.97% against the dollar to $1.0157.
The Australian dollar AUD=D3 , which is also viewed as a proxy for global growth, dropped 1.43% to $0.7021. The New Zealand dollar NZD=D3 fell 1.45% to $0.6363.
The offshore yuan CNH= hit 6.8197, the weakest since May 16, after China's central bank cut key lending rates in a surprise move to revive demand.
The dollar index has fallen from a 20-year high of 109.29 on July 14 on hopes that the Federal Reserve will slow its aggressive pace of rate increases and that the worst of inflation increases may be behind us.
Concerns that the Fed tightening will send the economy into recession has also sent U.S. Treasury yields lower.
However, Fed officials have maintained a hawkish tone and stressed it is too soon to declare victory on inflation.
“The Fed is telling us they want to tighten financial conditions and the market has eased them, so the Fed is going to have to drive home its point with a larger rate hike,” said Chandler, adding he expects the U.S. central bank to raise rates by 75 basis points at its September meeting.
Data this week including industrial production on Tuesday and retail sales on Wednesday could also “help ease fears that the U.S. contracted again,” Chandler said, which would boost the greenback.
U.S. single-family homebuilders' confidence and New York state factory activity fell in August to their lowest levels since near the start of the COVID-19 pandemic, data on Monday showed.
======================================================== Currency bid prices at 3:02PM (1902 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 106.5200 105.7000 +0.79% 11.349% +106.5500 +105.5400 Euro/Dollar EUR=EBS $1.0157 $1.0257 -0.97% -10.66% +$1.0270 +$1.0155 Dollar/Yen JPY=EBS 133.3250 133.6100 -0.22% +15.80% +133.5850 +132.5550 Euro/Yen EURJPY= 135.42 136.93 -1.10% +3.91% +137.0700 +135.2900 Dollar/Swiss CHF=EBS 0.9468 0.9411 +0.63% +3.82% +0.9471 +0.9409 Sterling/Dollar GBP=D3 $1.2055 $1.2135 -0.66% -10.87% +$1.2148 +$1.2051 Dollar/Canadian CAD=D3 1.2908 1.2773 +1.07% +2.11% +1.2934 +1.2774 Aussie/Dollar AUD=D3 $0.7021 $0.7122 -1.43% -3.43% +$0.7125 +$0.7012 Euro/Swiss EURCHF= 0.9618 0.9653 -0.36% -7.24% +0.9663 +0.9614 Euro/Sterling EURGBP= 0.8424 0.8451 -0.32% +0.29% +0.8470 +0.8420 NZ NZD=D3 $0.6363 $0.6456 -1.45% -7.05% +$0.6456 +$0.6357 Dollar/DollarDollar/Norway NOK=D3 9.7115 9.5785 +1.18% +10.02% +9.7150 +9.6040 Euro/Norway EURNOK= 9.8654 9.8095 +0.57% -1.47% +9.9042 +9.8188 Dollar/Sweden SEK= 10.3468 10.1833 +0.53% +14.74% +10.3497 +10.1907 Euro/Sweden EURSEK= 10.5105 10.4550 +0.53% +2.70% +10.5330 +10.4644
