© Reuters. FILE PHOTO: South Korean won, Chinese yuan and Japanese yen are seen on the US$100 bill in this file illustration, December 15, 2015. REUTERS / Kim Hong- Ji // Illustration
By Tom Westbrook and Rae Wee
SINGAPORE (Reuters) – The dollar kept trade-sensitive currencies pinned near multi-year lows on Monday and the euro came under pressure as investors sought safety on worries about global growth slowed.
Data on Friday showed eurozone inflation rising to another record, adding to the case that the European Central Bank raised interest rates this month.
While the common currency was steady at $1.0435 on Monday, it was barely above May’s 5-year low of $1.0349 and highlights the market’s preference for the dollar. when the outlook is bleak.
The Australian and New Zealand dollars hit two-year lows on Friday and weren’t far from that level in the early Asian session, with a 0.3% drop to $0.6796, after falling to a low as low as $0.6764 on Friday. Dropped 0.1% to $0.6197. [AUD/]
Trade is likely to ease slightly ahead of the Independence Day holiday in the US.
Safer flows tend to support the greenback, especially at the expense of trade and export-oriented currencies, as the world economy weakens. This has kept the dollar bullish even as growth concerns have dampened expectations of a US rate hike.
The index stood at 105,100, not far below last month’s two-decade high of 105,790. The Atlanta Federal Reserve’s much-watched GDP Now forecast fell to a -2.1% annualized rate in the second quarter, implying that the country has slipped into a technical recession.
Carol Kong, currency strategist at Commonwealth Bank of Australia (OTC:) in Sydney.
The pound hit a two-week low of $1.1976 on Friday and was last bought at $1.2095. [GBP/]
Ahead of this week, Australia’s central bank is due to meet on Tuesday and investors are also awaiting the release of minutes from Wednesday’s Federal Reserve meeting and US jobs data on Wednesday. Friday.
The markets have already priced in a 40 basis point (bp) increase in Australia, so the Aussie may not gain much if that delivers.
Minutes of the Fed’s June policy meeting on Wednesday almost certainly looked hawkish as the committee chose to raise rates to a super large 75 bps.
The market is pricing in about an 85% chance of another 75 basis point increase this month and interest rates at 3.25-3.5% year-end – before a cut in 2023.
Against Asian currencies, the dollar held on to gains on Friday, lifting it to its strongest level in years against the Thai baht, Indonesian rupiah and Singapore dollar. [EMRG/FRX]
Start of the session on land steady at 6.7021 per dollar. [CNY/]
Currency bid price at 0135 GMT
RIC Description Last US Close Pct Change Pct YTD High Bid Low Bid Low Bid
European Union currency
$1.0433 $1.0427 + 0.04% -8.24% +1.0444 +1.0418
Dollar / Yen
134.8100 135.2700 -0.34% + 0.00% +135,2950 +134.8150
Euro / Yen
140.63 140.99 -0.26% + 7.91% +141.1700 +140.6300
Dollar / Swiss
0.9584 0.9596 -0.05% + 5.15% +0.9596 +0.9583
British Pound / Dollar
1.2093 1.2095 + 0.00% -10.57% +1.2119 +1.2095
Dollar / Canadian
1.2900 1.2883 + 0.16% + 2.05% +1.2902 +1.2876
Aussie / Dollar
0.6796 0.6817 -0.31% -6.51% +0.6828 +0.6796
Dollar / Dollar 0.6197 0.6205 -0.13% -9.46% +0.6217 +0.6197
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