Dollar Rises set to end the week close to where it started
The U.S. dollar increased on Friday morning in Asia. It was set to end the week close to where it started. This week, currencies were tossed around by shifting risk appetite. Moreover, the market’s focus now shifts to next week’s Fed meeting.
The U.S. dollar index that tracks it versus a basket of six other currencies surged 0.05% to 92.880.
The dollar against the Japanese yen increased by 0.10% to 110.25. Remarkably, Japanese markets were closed for a holiday, while the Tokyo Olympics open later in the day.
The risk-sensitive Australian dollar fell by 0.01% to 0.7377 versus the dollar. Meanwhile, its New Zealand counterpart gained 0.21 against the greenback to 0.6978.
The American currency surged 0.04% to 6.4722 against the Chinese yuan. Additionally, the British pound fell by 0.01% against the dollar to trade at 0.3761.
The dollar is up 0.1% for the week; however, currency made very small moves overnight. On Wednesday, the greenback hit a 3 1/2-high of 93.193 but fell as investors regained some of the confidence lost as the number of Delta strain of coronavirus is rising around the world.
Investors also digested the European Central Bank’s policy decision handed down on July 22. The ECB pledged to keep its dovish monetary policy, as widely anticipated. Remarkably, the euro declined by 0.2% over the period at $1.1779 after the decision. Moreover, Bank Indonesia also handed down its policy decision on July 22.
Australia tightened its current lockdown in Sydney, the country’s most populated city
The market is now waiting for the U.S. Federal Reserve’s meeting next week.
According to Westpac analysts, the U.S. dollar is better positioned than others to withstand the spread of the Delta strain thanks to its earlier strong vaccination drive.
Meanwhile, the Australian dollar headed for a 0.2% drop, which would be a fourth consecutive weekly slump. As we know, Australia tightened its current lockdown in Sydney, the country’s most populated city, as the city reported its biggest daily surge in new COVID-19 cases in 2021.
Remarkably, it prompted speculation that the Reserve Bank of Australia could raise stimulus rather than lowering it when it next meets.
According to Commonwealth Bank of Australia strategist Joseph Capurso, the balance of risks points to more weakness in the Australian dollar in the near term.
Additionally, New Zealand Prime Minister Jacinda Ardern announced that the record number of infections in Sydney prompted New Zealand to pause its quarantine-free travel arrangement with Australia for at least eight weeks, starting later on Friday.
In cryptocurrencies, Bitcoin stood at $32,488.60, while the second-biggest cryptocurrency traded at $2,058.83.
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