FOREX-US dollar hits two-year high; the yuan plummets

Band Gertrude Chavez-Dreyfuss

NEW YORK, April 25 (Reuters)The U.S. dollar hit two-year highs as a wave of risk aversion hit global markets, while the Chinese yuan recorded its biggest three-day streak of losses in nearly four years due to growing fears of an economic slowdown in the world’s second largest economy.

As the war in Ukraine enters its third month and growing concerns over a China-wide COVID-19 outbreak trigger a rout in Chinese stocks, investors have dumped market darlings of currencies like the dollar Australian and offshore Chinese yuan. CNH=D3.

Against a basket of his rivals =USDthe dollar rose to 101.86, a level it last tested in March 2020. It was last at 101.76, up 0.7%, its biggest daily percentage gain since March 11.

“The dollar is increasingly in vogue given the gloomier outlook for the global economy, coupled with the Federal Reserve’s still assertive rhetoric about big rate hikes to help it tame inflation,” he said. said Joe Manimbo, principal market analyst at Western Union Business Solutions in Washington.

“China’s struggle to contain COVID-19 adds to the risk aversion that is partly behind the dollar’s dominance,” he added.

The Chinese Yuan CNY=CFXS fell to its lowest level in a year against the dollar and was last down 0.9% at 6.5615 yuan per US dollar.

The People’s Bank of China announced on Monday that it will cut the foreign exchange reserve requirement ratio (RRR) by 100 basis points to 8% as of May 15, to “improve the ability of financial institutions to utilize foreign currency funds “, according to an online statement. This was a measure to slow the depreciation of the yuan.

“We expect this reduction in RRR to slow CNY depreciation in the near term, although this also depends on the broad path of the US dollar and general sentiment toward Chinese growth,” Goldman Sachs said in a note. research.

The Aussie, which was one of the biggest currency gainers in the first quarter of 2022 thanks to soaring commodity prices, fell overall. It fell 0.9% against the US dollar to settle at US$0.7176. AUD=D3 and fell 1.4% against the Japanese yen AUDJPY=EBS at 91.88 yen.

The Norwegian krone also fell nearly 2% against the US dollar, which last traded at 9.1250. NOK=D3

Broader gauges of forex market volatility rose .DBCVIXwith an index reaching its highest levels for more than a month.

BofA Securities strategists said despite renewed volatility in the currency market, investors were long in the Canadian dollar, Aussie and euro.

The euro’s tiny gains after French President Emmanuel Macron’s comfortable election victory over far-right rival Marine Le Pen quickly faded, along with the single currency EUR=EBS down 0.9% at $1.0717, against a resurgent dollar.

The latest positioning data from last week showed that hedge funds have reduced their long bets on the euro. EURNETUSD=

Belligerent comments from various policymakers last week also raised the risks of aggressive policy tightening by global central banks. Money markets expect the US Federal Reserve to raise interest rates by half a point in the next two meetings and the European Central Bank to raise interest rates by 25 basis points in July. FEDWATCH, ECBWATCH

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Currency rates at 3:44 p.m. (1944 GMT)

The description

RIC

Last

Closing of the previous session

Percentage change

Percentage change since the beginning of the year

High bid

Low bid

dollar index

=USD

101.6700

101.0800

+0.60%

6.279%

+101.8600

+101.0500

euro dollar

EUR=EBS

$1.0717

$1.0810

-0.86%

-5.73%

+$1.0852

+$1.0697

dollar/yen

JPY=EBS

128.0100

128.5000

-0.39%

+11.18%

+128.8550

+127.5250

Euro/Yen

EURJPY=

137.18

138.78

-1.15%

+5.26%

+139.1900

+136.4900

Dollar/Swiss

CHF=EBS

0.9585

0.9565

+0.23%

+5.10%

+0.9597

+0.9548

British pound/dollar

GBP=D3

$1.2740

$1.2840

-0.77%

-5.79%

+$1.2880

+$1.2697

Canadian dollar

CAD=D3

1.2719

1.2711

+0.06%

+0.59%

+1.2777

+1.2707

Australian/Dollar

AUD=D3

$0.7177

$0.7244

-0.94%

-1.28%

+$0.7268

+$0.7135

Euro/Switzerland

EURCHF=

1.0270

1.0333

-0.61%

-0.95%

+1.0347

+1.0245

Euro/pound sterling

EURGBP=

0.8410

0.8410

+0.00%

+0.12%

+0.8441

+0.8398

New Zealand Dollar/Dollar

USD=D3

$0.6620

$0.6635

-0.23%

-3.29%

+$0.6635

+$0.6584

Dollar/Norway

NOK=D3

9.1285

8.9595

+1.90%

+3.64%

+9.1745

+8.9450

Euro/Norway

EURNOK=

9.7842

9.6683

+1.20%

-2.28%

+9.8235

+9.6594

Dollar/Sweden

SEK=

9.7144

9.5245

+1.13%

+7.72%

+9.7461

+9.5142

Euro/Sweden

EUREK=

10.4099

10.2933

+1.13%

+1.72%

+10.4374

+10.2954

World exchange rateshttps://tmsnrt.rs/2RBWI5E

Foreign exchange positionshttps://tmsnrt.rs/3rQdVMK

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saikat Chatterjee in London; Editing by Jonathan Oatis and Alistair Bell)

(([email protected]; 646-301-4124; Reuters Messaging: [email protected]))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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