Dollar wobbles lower as China growth hopes lift Aussie By Reuters



© Reuters. FILE PHOTO: An employee of a money changer holds a stack of U.S. dollar notes before giving it to a customer in Jakarta, October 8, 2015. REUTERS/Beawiharta

By Tom Westbrook

SINGAPORE (Reuters) – The dollar began the week on the back foot, following its first weekly loss in nearly two months, as investors cut bets on further dollar gains from rising U.S. rates and turned hopeful that loosening lockdowns in China can help global growth.

U.S stock market futures bounced sharply in early Asia trade and pulled the risk-sensitive Australian and New Zealand dollars along for the ride. [MKTS/GLOB]

The was last up 0.4% at $0.7080 and has lifted 3.8% in a week and a half. The rose 0.6% to $0.6450, a three-week high. [AUD/]

“It’s a reasonably positive start to the week,” said National Australia Bank (OTC:)’s head of foreign exchange strategy, Ray Attrill.

“We did have a sharp reversal of U.S. equity market weakness in the last hour or so on Friday, so maybe there’s some momentum there,” he added. “The U.S. dollar looks, for the time being, to be losing upside momentum.”

The euro and yen rose, with the yen up 0.1% to 127.83 per dollar and the euro up 0.2% at $1.0586 following last week’s 1.5% gain on the dollar.

The fell 0.1% to 102.790, about 2% beneath a two-decade high of 105.010 made earlier in May.

“The dollar may be carving out a peak, given Europe’s resilience to the energy shock and potential easing of lockdowns in China,” said Commonwealth Bank of Australia (OTC:) strategist Joe Capurso.

“Given the type of policy support, we expect investment to rebound faster than consumer spending,” he said. “Investment is mining commodity-intensive (and therefore) very positive for commodity currencies such as the Australian dollar and Canadian dollar, in addition to the yuan.”

CHINA HOPE

Shanghai is edging out of lockdown and an unexpectedly big rate cut in China last week has been taken a signal that authorities are going to provide support to a recovery.

The city of 25 million expects to lift its city-wide lockdown and return to more normal life from June 1.

The yuan had its best week since late 2020 last week and firmed to 6.6861 per dollar in offshore trade early on Monday. [CNY/]

The Canadian dollar rose for a third straight week last week and was a touch higher at C$1.2814 per dollar early on Monday. [CAD/]

Sterling leapt nearly 2% last week on the back of stronger-than-expected retail data and markets’ broader re-think on whether global central banks are really lagging much behind the Federal Reserve. It was last up 0.3% at $1.2527. [GBP/]

Geopolitics are in focus in Asia this week as U.S. President Joe Biden tours the region, promoting greater U.S. economic engagement and seeking to push back against China’s influence.

He meets Japan’s Emperor on Monday ahead of talks with Prime Minister Fumio Kishida.

Australia elected a new government on Saturday, though the market reaction was muted as polls had predicted victory for the centre-left Labor Party and it is not expected to shift the direction or pace of interest rate rises.

The Reserve Bank of New Zealand is expected to lift its benchmark cash rate by 50 basis points on Wednesday. U.S. Federal Reserve meeting minutes are also due on Wednesday.

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Currency bid prices at 0039 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar

$1.0588 $1.0569 +0.18% -6.87% +1.0590 +1.0559

Dollar/Yen

127.8700 127.9100 -0.07% +11.13% +128.0500 +127.8200

Euro/Yen

135.40 135.03 +0.27% +3.90% +135.4300 +135.0000

Dollar/Swiss

0.9733 0.9743 -0.11% +6.69% +0.9751 +0.9732

Sterling/Dollar

1.2525 1.2496 +0.26% -7.37% +1.2529 +1.2482

Dollar/Canadian

1.2802 1.2846 -0.32% +1.28% +1.2842 +1.2805

Aussie/Dollar

0.7085 0.7052 +0.48% -2.52% +0.7090 +0.7046

NZ

Dollar/Dollar 0.6446 0.6410 +0.65% -5.75% +0.6451 +0.6400

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ



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