Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Dollar, Safe-Haven Currencies Up Over Fading Recovery Optimism

Published 17/08/2021, 03:54
Updated 17/08/2021, 03:54
© Reuters.

© Reuters.

By Gina Lee

Investing.com – The dollar was up on Tuesday morning in Asia. Disappointing economic data from China, the continuous spread of COVID-19's Delta variant, and political tension in Afghanistan all served to curb the market’s risk appetite, giving the safe-haven U.S. currency a boost.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.05% to 92.668 by 10:43 PM ET (2:43 AM GMT).

The USD/JPY pair inched up 0.01% to 109.25.

The AUD/USD pair was down 0.35% to 0.7311, with the Reserve Bank of Australia releasing the minutes from its latest meeting earlier in the day. The NZD/USD pair was down 0.50% to 0.6982, with the Reserve Bank of New Zealand due to hand down its policy decision on Wednesday.

The USD/CNY pair inched up 0.07% to 6.4786 while the GBP/USD pair edged down 0.19% to 1.3824.

Other safe-haven currencies, such as the yen, also gained against riskier currencies. The euro fell as low as 128.50 yen, its lowest level since late March. 2021. The Swiss franc also remained near a nine-month high of 1.0720 reached earlier in the month against the euro, trading at 1.0745 francs to the euro.

"The moves seem to reflect a deteriorating in market sentiment. You could say the impact of COVID-19's Delta variant is behind this," Daiwa Securities senior strategist Yukio Ishizuki told Reuters.

Investors are still digesting Monday’s data from China that said industrial production and retail sales fell more than expected in July as the world’s second-largest economy continues to deal with its latest COVID-19 outbreak.

Meanwhile, U.S. Federal Reserve Chairman Jerome Powell will speak at a town hall for educators later in the day. However, it is widely expected that he will not address monetary policy at this meeting but wait until the central bank’s Jackson Hole symposium, due to take place next week.

The Fed will also release the minutes from its latest meeting on Wednesday, while U.S. core retail sales and retail sales data will be released later in the day.

Developments in Afghanistan, after the Taliban seized the capital city of Kabul, also curbed risk appetite. However, the direct impact for markets has so far been limited, according to some investors.

Latest comments

The fall of the US-backed regime in Afghanistan has shown that it has become expensive for the US to maintain a swarm there. The weakening of business activity in China is caused by economic policies aimed at saving money . The rapid growth of the Chinese economy was necessary to strengthen China's economic power over the leading economies of the world . In the future, we will observe a decline in business activity in China. As for the problem of the pandemic, the panic due to the new states of the virus wakes up so strong than when COVID-19 appeared . Everyone is already tired of being afraid .
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.