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Dollar retreats as risk appetite improves; Australian and New Zealand currencies appreciate According to Reuters



© Reuters. FILE PHOTO: The US$100 bill is seen in this illustration taken in Seoul February 7, 2011. REUTERS/Lee Jae-Won/File Photo

By Rae Wee

SINGAPORE (Reuters) – The dollar fell sharply on Tuesday while the Australian and New Zealand currencies jumped as risk appetite increased after China said it would scrap COVID quarantine rules for domestic travelers – an important step towards easing border restrictions.

The New Zealand dollar rose 0.65% to $0.63115 while the US dollar gained 0.25% to $0.67485 in mostly thin trading during the year-end holiday season. Two commonly used currencies as liquid proxies for .

China will stop requiring domestic travelers to undergo quarantine upon arrival from January 8, even as COVID cases spike, the National Health Commission said on Monday. At the same time, Beijing downgraded the regulations governing COVID cases to the less stringent Category B from the top-level Category A.

“It seems that the pace of easing of COVID restrictions has not slowed despite the rise in the number of COVID cases in the mainland,” said Christopher Wong, currency strategist at OCBC. “This probably represents the determination of Chinese policymakers to fully reopen.

“Also, there’s news of China’s ability to take extraordinary measures to support growth,” Wong said.

Elsewhere, the pound rose 0.16% to $1.20865, while the euro gained 0.06% to $1.06395.

Against a basket of currencies, the index was stable at 104.12.

Data released on Friday showed U.S. consumer spending barely picked up in November, while inflation continued to cool, reinforcing expectations that the Federal Reserve could scale back. on its way to tightening its aggressive monetary policy.

“December is a weak month for the greenback,” said ING FX strategist Francesco Pesole.

“It’s worth remembering that the dollar rallied over the past four years in January. Our view for early 2023 remains a rebound in the dollar.”

The Japanese yen rose 0.1% to 132.75 to the dollar, as the recent vulnerability continued to be supported by the Bank of Japan’s (BOJ) surprise adjustment to sugar policy. yield curve last week.

BOJ Governor Haruhiko Kuroda on Monday brushed aside the chance of a short-term exit from extremely loose monetary policy, even as markets and policymakers are signaling a growing focus on monetary policy. increased on what happens after Kuroda’s term ends in April next year.

Analysts at Wells Fargo (NYSE:).

“Inflationary pressures are expected to ease, which should dampen the BOJ’s momentum for further policy moves.”

In the crypto space, crypto lender Vauld has canceled its potential acquisition by rival Nexo, according to a CoinDesk report.

was last slightly lower at $16,914, while Ether fell 0.1% to $1,227.

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