NEW YORK: The dollar hit 4-1/2 month lows against major peers on Tuesday, as markets seemed to accept US Federal Reserve arguments that monetary policy should stay easy because inflationary forces are broadly weak, while China state-owned banks were seen trying to curb a yuan rally.
The onshore yuan appreciated to 6.4016 per dollar, the strongest since 2018, after opening at 6.4110. China’s major state-owned banks, four sources said, were seen buying US dollars at around 6.4 yuan in the Asian afternoon in a move viewed as an effort to cool a yuan rally led by its offshore counterpart.
The weakness of the dollar came as US market interest rates slipped again and yield on benchmark 10-year Treasuries hit fresh two-week lows and was at 1.579% in mid-morning in New York.
The dollar index against major currencies was off 0.2% in the morning in New York after having fallen as much as 0.3% to 89.533, its lowest since Jan. 7.
The euro climbed to early January levels and was last up 0.3% on the day to $1.2249.
Sterling, which had run up about 1.2% over the past three weeks while other majors have steadied or even slipped, was stalled at $1.4136 as though it could not break above $1.42.
Cryptocurrencies bitcoin and ether was off about 3% for the day in the morning in New York.
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