By Gina Lee
Investing.com – The dollar was down on Monday morning in Asia as investors cut bets on further gains from rising U.S. interest rates and hoped that loosening lockdowns in China can boost the global economy.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies fell 0.43% to 102.735 by 10:46 PM ET (2:46 AM GMT).
“The dollar may be carving out a peak, given Europe’s resilience to the energy shock and potential easing of lockdowns in China,” Commonwealth Bank of Australia strategist Joe Capurso told Reuters.
The USD/JPY pair fell 0.40% to 127.31.
“It’s a reasonably positive start to the week,” National Australia Bank’s head of foreign exchange strategy Ray Attrill told Reuters.
“We did have a sharp reversal of U.S. equity market weakness in the last hour or so on Friday, so maybe there's some momentum there,” Attrill added. “The U.S. dollar looks, for the time being, to be losing upside momentum.”
“Given the type of policy support, we expect investment to rebound faster than consumer spending,” Capurso told Reuters. “Investment is mining commodity-intensive (and therefore) very positive for commodity currencies such as the Australian dollar and Canadian dollar, in addition to the yuan.”
The USD/CNY pair inched down 0.05% to 6.6894, while GBP/USD pair gained 0.42% to 1.2538. China is loosening its lockdowns in Shanghai and cut its five-year loan prime rate last week, signaling that the authorities are supporting a recovery.
Geopolitics is also on investors’ radar. U.S. President Joe Biden started his Asia tour to Seoul and Tokyo last Friday, promoting greater U.S. economic engagement and counter against China’s influence. Biden met Japan’s emperor early today ahead of talks with Prime Minister Fumio Kishida.
In Asia Pacific, Australia elected a new government on Saturday, but it is not expected to change the direction of interest rate hikes.
The Reserve Bank of New Zealand is expected to raise its benchmark cash rate by 50 basis points on Wednesday. Investors also await U.S. Federal Reserve meeting minutes, due on the same day.
On the data front, U.S. new home sales, as well as the manufacturing and services Purchasing Managers Index , will be released on Tuesday.
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