The dollar was up on Tuesday morning in Asia
2022.07.05 07:55
The dollar was up on Tuesday morning in Asia, gaining support from a strong rebound in the U.S. 10-year Treasury yields.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies stabilized at 105.14 by 12:32 AM ET (4:32 AM GMT).
The USD/JPY pair gained 0.42% to 136.26.
The AUD/USD pair edged down 0.11% to 0.6856, and the NZD/USD pair inched down 0.06% to 0.6201.
The USD/CNY pair edged down 0.10% to 0.6933, while GBP/USD pair inched up 0.01% to 1.2106.
U.S. 10-year Treasury yields pushed past 2.959% after reopening from a holiday, from the lowest since May at 2.7910% on Friday.
The euro rose 0.13% to $1.0435, gaining support after Bundesbank chief Joachim Nagel said the very accommodative stance of the European Central Bank (ECB) would “swiftly be abandoned” and a restrictive policy stance might be needed to achieve the inflation target.
The policy outlook may not sustain the euro longer term, National Australia Bank (OTC:NABZY) markets economist Tapas Strickland said in a note.
“Europe remains stuck in the middle between the Russia-Ukraine crisis and a weakening global economy,” he said.
“Given Europe’s dire predicament, it is hard to see an enduring euro rally, which may keep USD strength going for longer.”
U.S. President Joe Biden may announce a rollback of some U.S. tariffs on $300 billion in Chinese imports this week to counter inflation. Biden administration could also unveil a probe into industrial subsidies, which might lead to more duties in strategic areas like technology.
In Asia Pacific, China’s services activity grew at the fastest rate in June in almost a year as COVID curbs eased and demand revived. China Caixin services purchasing managers’ index (PMI) rose to 54.5 in June, indicating the fastest growth since July last year and the first expansion since February.
Investors now are also monitoring Australia’s interest-rate decision, which is due later in the day. The central bank is expected to deliver a back-to-back half-percentage point interest rate hike.
