VnExpress International
The most read Vietnamese newspaper
Get Newsletter| Contact us |
Follow us on       

Dollar nears pandemic peaks as investors seek safety

By Reuters   April 26, 2022 | 06:27 pm PT
Dollar nears pandemic peaks as investors seek safety
U.S. dollar notes are seen in this November 7, 2016 picture illustration. Photo by Reuters/Dado Ruvic
The dollar stood at its highest level since the early days of the pandemic on Wednesday and was heading for its best month since 2015, supported by the prospect of U.S. rate hikes and on safe-haven flows fanned by slowing growth in China and Europe.

The U.S. dollar index , which measures the greenback against a basket of six major currencies, sat by its overnight high of 102.37, the strongest it has been since March 2020.

The euro fell below its pandemic lows to $1.0635 in early trade, a five-year trough, on fears for energy security and Europe's growth after Russia's Gazprom said it would halt gas supply to Poland and Bulgaria later in the day.

Commodity currencies have also been sold in favour of the greenback, driving the New Zealand dollar close to its lowest levels of this year at $0.6562 and the Australian dollar to a two-month low of $0.7119.

The Aussie was steady in early trade ahead of inflation data due at 0130 GMT.

"The dollar is the hedge in markets presently, while commodities including gold are no longer working as effectively," said analysts at Citi.

"The dollar is 'quality carry,'" they added. "The dollar also offers more yield than any of the other safe haven FX alternatives."

Still, safety flows have also supported the yen , which lifted away from recent lows to a one-week high of 126.96 and overnight enjoyed its best day on the struggling British pound in more than two years .

The Bank of Japan meets on Wednesday and Thursday and markets see some risk of adjustment to forecasts or even policy changes to try and arrest the yen's recent tumble.

Japanese Prime Minister Fumio Kishida played down such a risk on Tuesday.

The Chinese yuan , down more than 3.5 percent for the month, was under pressure at 6.5902 per dollar in offshore trade. The South Korean won was slammed to a two-year trough after North Korea pledged to boost its nuclear arsenal.

Sterling , which has dropped more than 2 percent on the dollar this week as soft retail sales data has prompted a re-think of Britain's rates outlook, hit a fresh 21-month low of $1.2560 on Wednesday.

Bitcoin sold overnight as investors dumped risky assets, hovered near a six-week low at $38,228.

 
Enjoy unlimited articles and premium content with only $1.99 Subscribe now
 
go to top