Dollar eyes multi-week lows as risk assets rally

The dollar bought 0.9384 Swiss franc today in Asia, close to the lowest in almost four months. — AFP pic
The dollar bought 0.9384 Swiss franc today in Asia, close to the lowest in almost four months. — AFP pic

TOKYO, July 9 ― The dollar nursed losses against most currencies today as a rally in riskier assets such as global equities and commodities put a dent in safe-haven demand for the US currency.

Traders in Asia are focused on whether China's yuan can extend gains against the greenback as investors of all stripes shift funds to increase positions in Chinese stocks.

Lingering worries about the spread of the coronavirus could keep some currency pairs in a tight range, but the dollar's losses are gradually increasing as sentiment favours riskier bets on long-term economic growth.

“Rising stocks and a dip in Treasury yields are slight negatives for the dollar, but the market can't move too far because we still have to worry about the virus,” said Minori Uchida, head of global market research at MUFG Bank.

“A lot of major US economic data have been positive, so this will be less of a trading factor going forward. People are looking for cues from stocks, yields, and hedging costs.”

The dollar bought 0.9384 Swiss franc today in Asia, close to the lowest in almost four months.

Against the euro, the dollar was quoted at US$1.1334 (RM4.8339), close to a three-week low.

The greenback was also close to a three-week low against the pound, last trading at US$1.2614.

Sterling held steady at 89.86 pence per euro.

The dollar was little changed at ¥107.32.

Asian stocks rose today in a sign that financial markets are following gains in the tech-heavy Nasdaq to a record closing high on Wednesday.

A light event calendar in Asia today could keep some currency pairs in tight ranges, but analysts said sentiment favours more dollar declines as investors try to look past a recent spike in coronavirus cases in some countries.

The coronavirus pandemic is a global phenomenon, but success in containing the virus varies greatly from region to region, which has discouraged some investors from taking big positions before the traditional summer holiday season.

Elsewhere in currencies, the Australian dollar rose to US$0.6990, approaching its strongest level in a month.

The New Zealand dollar was little changed at US$0.6578, also close to a one-month high. ― Reuters

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