Tom Westbrook

SINGAPORE, (Reuters) – The dollar started the week in the wrong foot after its first loss of nearly two months. Investors cut back on dollar gains due to rising U.S. rate and became optimistic that China’s loosening restrictions can lead to global growth.

U.S. stock markets futures shot up in Asia early trade. The U.S. also drew the risk-sensitive New Zealand and Australian dollars along. [MKTS/GLOB]

Last week, the price was up 0.4% to $0.7080. It has risen 3.8% over the past week. This is a 3-week record high, with the price rising 0.6% at $0.6450. [AUD/]

Ray Attrill (National Australia Bank) said, “It is a relatively positive start of the week.”

His comments included that there was a sharp turn in U.S. equity markets weakness over the past hour, which suggested there might be some momentum. For the moment, “The U.S. Dollar appears to be losing upward momentum”

Following last week’s 1.5% increase on the dollar, both the euro and the yen increased. They were 0.1% higher at USD127.83 and 0.2% respectively at $1.0586.

It fell to 102.790 by 0.1%, just 2% below the two-decade peak of 105.010 set earlier in May.

“The dollar may be carving out a peak, given Europe’s resilience to the energy shock and potential easing of lockdowns in China,” said Commonwealth Bank of Australia (OTC:) strategist Joe Capurso.

He said, “Given this type of support policy we expect investment will rebound faster than consumers spending.” “Investment in mining commodities is (and therefore) very favorable for commodity currencies, such as the Australian and Canadian dollars, along with the yuan.

CHINA’S HOPE

Shanghai has begun to emerge from lockdown, and the unexpectedly large rate reduction in China last week was taken as a sign that authorities will support a recovery.

A city of 25 million plans to lift the lockdown throughout its entire city, and return to a more normal lifestyle starting in June.

The yuan experienced its strongest week since the end of 2020 and climbed to 6.6861 dollars in offshore trading early Monday. [CNY/]

Canadian dollars rose last week for the third consecutive week, and were slightly higher at C$1.2814 per $1 early Monday. [CAD/]

Sterling leapt nearly 2% last week on the back of stronger-than-expected retail data and markets’ broader re-think on whether global central banks are really lagging much behind the Federal Reserve. Last week, it rose 0.3% to $1.2527. [GBP/]

This week, geopolitics in Asia are on the forefront as U.S. President Joe Biden visits the region. He promotes greater U.S. economic involvement and seeks to counter China’s influence.

On Monday, he meets Japan’s Emperor ahead of meeting Prime Minister Fumio Kishhida.

Australia elected a new government, but the market reaction was weak as the polls predicted victory for Labor Party. It is unlikely that it will change the pace or direction of the interest rate increases.

Expect the Reserve Bank of New Zealand to increase its benchmark cash rates by 50 basis point on Wednesday. Minutes of the U.S. Federal Reserve Meeting are due Wednesday.

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Exchange rate bid prices starting at 0039 GMT

Description U.S.. Close Pct. YTD Change Pct High Low Bid

Previous changes

Session

Euro/Dollar

$1.0588 $1.0569 +0.18% -6.87% +1.0590 +1.0559

Dollar/Yen

127.8700 127.9100 -0.07% +11.13% +128.0500 +127.8200

Euro/Yen

135.40 135.03 +0.27% +3.90% +135.4300 +135.0000

Dollar/Swiss

0.9733 0.9743 -0.11% +6.69% +0.9751 +0.9732

Sterling/Dollar

1.2525 1.2496 +0.26% -7.37% +1.2529 +1.2482

Dollar/Canadian

1.2802 1.2846 -0.32% +1.28% +1.2842 +1.2805

Aussie/Dollar

0.7085 0.7052 +0.48% -2.52% +0.7090 +0.7046

NZ

Dollar/Dollar 0.6446 0.6410 +0.65% -5.75% +0.6451 +0.6400

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