SINGAPORE, June 27 — The dollar found support from investors worried about recession and seeking safety to hold just below a two-decade high today, having slipped late last week after downbeat US economic data reduced bets on US interest rate hikes.

While Asian stocks followed Wall Street higher, currency traders were wary of extending Friday’s dollar selling because the dollar typically rises in times of uncertainty.

The risk-sensitive Australian dollar eased 0.3 per cent to US$0.6918 (RM3.05), weighed down by sliding commodity prices. The euro was pinned at US$1.0563, though the beaten-down yen steadied to 134.68 per dollar.

The US dollar index was steady at 104.010, having made a 20-year peak of 105.79 earlier in the month.

Weakening US economic data knocked it off that perch, and a survey released on Friday showed consumer confidence at a record low, giving another prompt for investors to cut back bets on US interest rate hikes.

But the spectre of a global slowdown, and a preference for dollar-denominated assets in such times, has underpinned the greenback.

“The dollar tends to rise when people worry about a global recession,” said Commonwealth Bank of Australia strategist Joe Capurso in Sydney.

Futures pricing shows traders now anticipating the US Federal Reserve’s benchmark funds rate stabilising around 3.5 per cent from March next year, a pullback from pricing in rates zooming close to 4 per cent in 2023. Treasuries rallied last week.

The New Zealand dollar was pinned at US$0.6035, while sterling GBP=D3 was stuck at US$1.2282.

Chinese factory activity data due to be released later this week could provide a guide as to whether the world’s second-largest economy is finding momentum again after the disruption caused by strict Covid-19 lockdown measures. — Reuters