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Dollar Down, But Losses Capped as Markets Enter “Twilight Zone” By


© Reuters.

By Gina Lee – The dollar was down on Wednesday morning in Asia, but remained near its strongest levels in 2021. investor nervousness about the U.S. Federal Reserve beginning asset tapering as economic challenges start to emerge, all capped losses for the safe-have asset.

The that tracks the greenback against a basket of other currencies inched down 0.06% to 93.722 by 12:56 AM ET (4:56 AM GMT).

The pair inched up 0.02% to 111.52. Japan’s incumbent Liberal Democratic Party will vote for a leader, likely to be the country’s next prime minister, on Wednesday.

The pair edged up 0.20% to 0.7250 and the pair inched down 0.06% to 0.6951.

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The pair edged up 0.12% to 6.4672 and the pair edged up 0.11% to 1.3548.

As the Fed continues to prepare to taper assets before the year 2021, benchmark 10-year U.S Treasury yields increased 25 basis points over five sessions to 1.5548%.

“Compared to the unencumbered optimism at the start of 2021, it is a twilight zone for markets as the year approaches its end,” Deutsche Bank (DE:) analysts said in a note.

According to the note, “Persistently stagnant inflationary dynamics (i.e. The note stated that a Fed with hawkish growth and a low dollar would leave little room to a dollar decline.

Surging energy prices, concern about the growth outlook in China, with developer China Evergrande Group facing its latest bond interest payment interest on Wednesday, and rolling power outages that are impacting output all remained on investors’ radars.

Overnight, the pound suffered a particularly heavy blow due to worries about the economic consequences of fuel shortages and an increase in gasoline prices.

The Reserve Bank of New Zealand (RBNZ) is due to hand down its in the following week and is widely expected to hike interest rates.

Imre Speizer, Westpac analyst at Westpac said that the NZD/USD remained stable around $0.7000 because of the effect of the hawkish RBNZ offsets by rising expectations from the Fed.

ECB President Christine Lagarde and Jerome Powell (Fed Chairman), Bank of England Governor Andrew Bailey and Bank of Japan Governor Haruhiko Kroda will all be present at an ECB forum later that day.

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