Image: Reuters Berita 24 English - After slipping late last week after dismal U.S. economic data lowered bets for U.S. interest rate hikes,...
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| Image: Reuters |
Berita 24 English - After slipping late last week after dismal U.S. economic data lowered bets for U.S. interest rate hikes, the dollar found support from investors wary of recession and looking for shelter to remain just below a two-decade high on Monday.
Although Asian equities rose in tandem with Wall Street, currency dealers were reluctant to extend Friday's dollar selling because the dollar usually climbs during uncertain times.
Due to declining commodity prices, the risk-averse Australian dollar declined 0.3 percent to $0.6918. The battered yen held steady at 134.68 per dollar as the euro remained stuck at $1.05.
After reaching a 20-year high of 105.79 earlier in the month, the U.S. dollar index remained stable at 104.010.
It was pushed off that perch by deteriorating U.S. economic data, and a survey issued on Friday revealed record-low consumer confidence, another reason for investors to reduce their expectations on U.S. interest rate hikes.
However, the threat of a global downturn and people's desire for dollar-denominated assets in such circumstances have supported the dollar.
According to Commonwealth Bank of Australia strategist Joe Capurso in Sydney, "the dollar tends to appreciate when people fear about a global recession."
The benchmark funds rate of the U.S. Federal Reserve is expected to stabilise around 3.5 percent from March of next year, according to futures pricing, a reduction from rates projected to soar as high as 4 percent in 2023. Last week, Treasuries increased.
Sterling was frozen at $1.2282 while the New Zealand dollar was fixed at $0.6035.
The second-largest economy in the world, China, may be regaining speed after being disrupted by the rigorous COVID-19 lockdown measures, according to factory activity figures that will be announced later this week.
