Tags: Forex Market
Dollar, Yen Down

The Dollar fell on Asian Trade along with Safe-haven Yen

On Monday morning, the dollar plummeted in Asia. At the same time, the yen, another safe-haven asset, fell to its lowest level in three months.

Riskier assets, such as the Australian dollar, continued to recover from a nearly one-month low as concerns about China Evergrande Group’s debt condition eased marginally. The U.S. Dollar Index, which measures the greenback’s value against a basket of other currencies, lost 0.12% to 93.222.

“The link between U.S. bond yields and the USD-JPY has increased. USD-JPY looks a little stretched, so I’d be reluctant to chase here. However, I would be looking for a re-test of 110.50 as a potential support zone within what is a gradually bullish trend,” Pepperstone head of research Chris Weston said.

 

Currencies

 

The USD/JPY exchange rate fell 0.14 percent to 110.56.

The AUD/USD pair moved up 0.32 percent to 0.7281, while the NZD/USD pair crept up 0.12 percent to 0.7020.

The USD/CNY pair fell 0.12 percent to 6.4585, while the GBP/USD pair fell 0.04 percent to 0.3677.

On Monday, the benchmark 10-year U.S. Treasury yield rose to 1.466 percent for the second day in a row. It reached its highest level since July 2, 2021.

 

Investors and market

 

Higher U.S. yields drew money from Japanese investors, leading to the yen’s decline.

“The U.S. dollar should stay caught in the cross-currents of a more hawkish Fed, and receding fears over a potential Evergrande default,” Commonwealth Bank of Australia analysts wrote in a client note.

Concerns that China Evergrande may default on its $305 billion in debt have recently cast a shadow over markets. However, some of those concerns appear to be dissipating. On top of the net CNY320 billion added last week, the People’s Bank of China pumped a net CNY100 billion ($15.46 billion) into the banking system on Monday.

Investors, on the other hand, are skeptical about the scenario. Nevertheless, the risks are tilted to a firmer dollar,” with any further Evergrande worries unlikely to produce the level of market volatility of the previous week, the CBA paper stated.

In Europe, the euro was little changed at $1.1724 even as Germany’s Social Democrats barely won over incumbent Chancellor Angela Merkel’s Christian Democratic Union of Germany party in Sunday’s election.

Sending
User Review
0 (0 votes)

RELATED POSTS

Leave a Reply

tmn-img-28-1

Share this on

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Rec­om­mended for You

Subscribe to Our Newsletters

Have The Best Of Trade Market News Delivered Directly To Your
Mailbox. Subscribe To Receive The Latest Market News.