Dollar Down over Recession Fears

  • Forex News
Dollar Down over Recession Fears
Credit: © Reuters.

By Zhang Mengying – The dollar was down on Monday morning in Asia over recession fears following weakening U.S. consumer confidence.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged down 0.20% to 103.98 by 1:32 AM ET (5:32 AM GMT).

The USD/JPY pair fell 0.28% to 134.79.

The AUD/USD pair was down 0.22% to 0.6933, and the NZD/USD pair inched up 0.06% to 0.6318.

The USD/CNY pair inched down 0.07% to 6.6850, while the GBP/USD pair edged up 0.18% to 1.2284.

U.S. University of Michigan consumer sentiment released on Friday showed that consumer confidence was at a record low in June, prompting investors’ bets on U.S. interest rate hikes.

For monetary policy moves, the U.S. Federal Reserve Bank of San Francisco President Mary Daly said on Friday that she supports another 75 basis-point interest rate hike in July while Fed Bank of St. Louis President James Bullard said fears of a U.S. recession are overblown.

“There’s a feeling that things aren’t as bad as we thought they were going to be,” Pepper International founder Carol Pepper told Bloomberg. Pepper added, “there’s a hope that perhaps we’ve oversold, perhaps there’s not going to be a recession.”

“The dollar tends to rise when people worry about a global recession,” Commonwealth Bank of Australia (OTC: CMWAY ) strategist Joe Capurso told Reuters.

Investors now also shift their focus to the Group of Seven (G7) leaders' meeting. The leaders plan to leaders plan to offer indefinite support to Ukraine for its defense against Russia’s invasion. The U.S., UK, Japan, and Canada also plan to announce a ban on new gold imports from Russia during the G7 summit.

In Asia Pacific, China’s purchasing managers index is due on Thursday, which could provide a clue on the world’s second-largest economy’s economic rebound path after COVID-19 disruptions.

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