Dollar soars amid pandemic worries; U.S. inflation data in sight

  • Dollar Index up 0.1%
  • Cryptocurrencies on the Defensive

NEW YORK, July 12 (Reuters) – The dollar rose across the board on Monday as concerns about the pandemic prompted investors to seek a safe haven and wait for more clues to the global economic recovery.

With markets hypersensitive to any discussion of an early cut, US inflation data will be closely watched on Tuesday ahead of Federal Reserve Chairman Jerome Powell’s testimony on Wednesday and Thursday.

“Market cautiousness prevailed at the start of the week, weighing on risk sentiment and pushing the US dollar higher,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

Reports around the world of the surge in infections of the Delta coronavirus variant have also hurt investors’ appetites for riskier assets. Read more

Investors will look at U.S. inflation data on Tuesday and economic testimony from Federal Reserve Chairman Jerome Powell on Wednesday and Thursday as they assess the Fed’s expectations to revisit policy measures. relaunch this year, said Manimbo.

“A warmer report will likely raise Treasury yields and the dollar, and bring the conversation about the Fed downturn back to the fore,” said Ronald Simpson, managing director of global currency analysis at Action Economics, in a statement. note.

The dollar index, which measures the greenback against a basket of six currencies, was up 0.1% to 92.264. The index remains close to a 3-month high of 92.844 hit last week.

The Australian dollar, often seen as a liquid indicator of risk, was down 0.17% that day.

The pound fell as British Prime Minister Boris Johnson was due to confirm his intention to remove almost all remaining COVID-19 restrictions in England from July 19, despite an increase in the number of cases to levels not seen in months .

The pound was down 0.22% to $ 1.3879.

Meanwhile, the People’s Bank of China (PBOC) said China will reduce the amount of liquidity banks are required to hold as reserves, freeing up around 1,000 billion yuan ($ 150 billion) in long-term liquidity to support a post-COVID economic recovery that is starting to lose momentum.

“While welcome, the move also signals that authorities are concerned about China’s growth prospects, so this is mixed news,” said Marshall Gittler, head of investment research at BDSwiss Holding.

The Canadian dollar was trading down about 0.1% to 1.2462 against the greenback, or 80.22 cents US.

Investors are waiting for a rate announcement from the Bank of Canada on Wednesday to see if the bank will announce a slowdown in asset purchases.

Cryptocurrencies were on the defensive with bitcoin down around 3.4% to $ 33,109.25 and ether down 5.2% to $ 2,028.54.

Report by Julien Ponthus; Editing by Kevin Liffey and Chizu Nomiyama

Our Standards: Thomson Reuters Trust Principles.

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