[1/2]This illustration taken on January 30, 2023 shows US dollar and Chinese yuan banknotes.Reuters/Dado Ruvic/Illustration/File photo Obtaining license rights
NEW YORK, Sept 5 (Reuters) – The dollar rose on Tuesday as concerns over growth in the global economy, particularly China, sent investors flocking to the safe-haven U.S. currency, but the Reserve Bank of Australia kept interest rates unchanged. As a result, the Australian dollar fell. .
China’s services activity expanded in August at the slowest pace in eight months, as weak demand continued to plague the world’s second-largest economy and stimulus measures failed to meaningfully revive consumption. This was revealed in a private investigation on Tuesday.
The drop in business activity in the euro zone accelerated faster than initially expected last month, a survey suggests, suggesting the euro zone could slip into recession, as the region’s main services industry falls into contraction. became.
“There are growing concerns about slowing global growth led by China and Europe, and as a result, the dollar is being bought as a solid safe-haven asset,” said Joe Manimbo, senior market analyst at Convera in Washington.
“At the same time, rising U.S. inflation is dampening expectations that the Fed will cut interest rates anytime soon,” he said.
Federal Reserve President Christopher Waller said on Tuesday that the latest economic data gives the U.S. central bank room to assess whether it needs to raise interest rates again, but for now it will force short selling costs to rise. He pointed out that no such movement was observed. Fixed term loan again.
Financial markets believe the Fed is done raising interest rates. But Waller pointed out that the Fed has suffered setbacks in the past when data that appeared to show improvement on the inflation front were met with more price pressures than expected, and that such assumptions should be avoided. I warned you not to.
The US dollar index, which measures the currency’s value against six major currencies, rose 0.63% to 104.81. The index hit a six-month high of 104.85 in early trading.
The euro fell 0.72% against the dollar after hitting a three-month low of $1.0719.
The US dollar also strengthened against the Chinese currency, last up 0.42% against the offshore-traded renminbi at 7.3081 yuan.
The Chinese-influenced Australian dollar is one of the weakest currencies against the US dollar, after Australia’s central bank on Tuesday kept interest rates on hold for three months, fueling speculation that the tightening cycle is over. , fell 1.42% to a 10-month low. Policymakers signaled they had a better grip on prices.
“It’s like a one-two punch against Australia. On the one hand you have the RBA’s decision to maintain the status quo and on the other hand you have the worrying news from China,” Convera’s Manimbo said.
The dollar rose to a 10-month high of 147.71 yen as traders focused on whether the Japanese government was prepared to intervene to support its currency as it did last year.
The pound hit a 12-week low against the dollar as the outlook for global economic growth worsened after a survey showed business activity in the UK contracted last month. The pound was last down 0.55% at $1.2559.
Among cryptocurrencies, Bitcoin fell 0.58% to $25,669, near a 12-week low.
Report by Saqib Iqbal Ahmed. Additional reporting by Alan John in London.Edited by: Shri Navaratnam, Alexander Smith, Shinjini Ganguly, Mike Harrison
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