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Sunday, August 14, 2022

Dollar broadly weaker in Asian trade

Dollar broadly weaker in Asian tradeTOKYO: The dollar broadly weakened against its Asian peers on Monday, fuelled by persistent worries over China’s economy ahead of a crucial US interest rate decision later this week.

Nervous traders moved into safer assets, pushing up the Japanese currency to 120.30 yen against the dollar, compared with 120.57 yen Friday in New York.

The yen is considered a safe bet in times of turmoil.

The euro was at 136.55 yen compared with 136.64 yen, and rose to $ 1.1341 from $ 1.1333 in US trade.

The possibility of a US rate hike has kept global markets on edge, with analysts split over whether the Federal Reserve will take that step on September 17 or not.

“It’s hard to justify that a US rate hike is the right move at this time,” Derek Mumford, director at Rochford Capital in Sydney, told Bloomberg News.

“There could be some squaring of positions prior to the decision and keep the US dollar certainly from going higher,” he said.

If the US central bank moves this week it would be the first hike in the benchmark federal funds rate since 2006.

Growth in China’s industrial production and retail sales accelerated in August, government data showed Sunday, but the figures missed analyst expectations and did little to ease international concern about the world’s second-largest economy.

Industrial production, which measures output at factories, workshops and mines, rose 6.1 percent year-on-year in August, while retail sales rose 10.8 percent.

The Australian dollar, which is seen as a benchmark indicator for Chinese sentiment because of the country’s close trade ties, moved away from six-year lows in Monday morning trade, touching 71.33 US cents.

The Aussie traded at 70.89 cents in the afternoon.

Copyright AFP (Agence France-Presse), 2015

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