AGL 7.09 Increased By ▲ 0.06 (0.85%)
ANL 10.60 Decreased By ▼ -0.15 (-1.4%)
AVN 76.60 Decreased By ▼ -0.70 (-0.91%)
BOP 5.51 Increased By ▲ 0.02 (0.36%)
CNERGY 5.25 Decreased By ▼ -0.01 (-0.19%)
EFERT 88.40 Decreased By ▼ -0.10 (-0.11%)
EPCL 74.40 Decreased By ▼ -0.50 (-0.67%)
FCCL 13.60 Decreased By ▼ -0.05 (-0.37%)
FFL 6.60 Decreased By ▼ -0.02 (-0.3%)
FLYNG 7.14 Decreased By ▼ -0.05 (-0.7%)
GGGL 10.85 Decreased By ▼ -0.05 (-0.46%)
GGL 16.56 Increased By ▲ 0.04 (0.24%)
GTECH 8.63 Decreased By ▼ -0.06 (-0.69%)
HUMNL 6.90 Decreased By ▼ -0.04 (-0.58%)
KEL 2.87 Increased By ▲ 0.01 (0.35%)
LOTCHEM 25.95 Increased By ▲ 0.70 (2.77%)
MLCF 25.70 Decreased By ▼ -0.09 (-0.35%)
OGDC 77.30 Decreased By ▼ -0.10 (-0.13%)
PAEL 15.52 Decreased By ▼ -0.10 (-0.64%)
PIBTL 6.04 Increased By ▲ 0.06 (1%)
PRL 16.90 Decreased By ▼ -0.29 (-1.69%)
SILK 1.27 Increased By ▲ 0.01 (0.79%)
TELE 10.75 No Change ▼ 0.00 (0%)
TPL 9.07 Decreased By ▼ -0.03 (-0.33%)
TPLP 19.70 Decreased By ▼ -0.15 (-0.76%)
TREET 28.70 Decreased By ▼ -0.08 (-0.28%)
TRG 77.20 Increased By ▲ 0.19 (0.25%)
UNITY 19.95 Increased By ▲ 0.01 (0.05%)
WAVES 12.65 No Change ▼ 0.00 (0%)
WTL 1.39 Increased By ▲ 0.01 (0.72%)
BR100 4,072 Increased By 0.5 (0.01%)
BR30 14,886 Decreased By -4.1 (-0.03%)
KSE100 41,146 Decreased By -13.8 (-0.03%)
KSE30 15,655 Decreased By -5.7 (-0.04%)

NEW YORK: The dollar hit a two-year high on Tuesday as concerns about slowing growth in China and expectations that the Federal Reserve will aggressively hike rates boosted demand for the greenback.

The Japanese yen also rebounded as investors speculated that the Japanese central bank or government may act to stabilize the currency, which last week hit a 20-year low against the dollar.

Concerns about Chinese growth have increased with the financial hub of Shanghai having been under strict lockdown to fight COVID for around a month. Beijing overnight also ramped up plans for mass-testing of 20 million people and fuelled worries about a looming lockdown.

Chinese growth concerns are “adding fuel to the fire that is dollar strength,” said Erik Nelson, a macro strategist at Wells Fargo in New York.

The Wall Street Journal also on Tuesday reported that Chinese President Xi Jinping has told officials that he wants China’s economic growth to outpace the United States’ this year.

That may be slower than previously expected. China last month targeted economic growth of around 5.5% this year.

“Consensus for US GDP growth this year is just barely above 3%, so that’s a huge, huge downgrade in terms of a growth target,” said Nelson.

The dollar index against a basket of currencies was last up 0.25% at 101.94, after earlier reaching 102.04, the highest since March 2020.

The offshore yuan was holding just below a 17-month low reached on Monday, after China’s central bank eased banks’ foreign exchange holding requirements in an effort to stem the currency’s drop.

The euro fell 0.35% to $1.0675, after earlier reaching $1.0663, the lowest since March 2020.

The single currency has been hurt by the economic impact of the war in Ukraine and by expectations the European Central Bank will move more slowly than the Fed in raising interest rates. The US central bank is expected to raise rates by 50 basis points when it meets next week, and again in June and July.

Fed funds futures traders expect the Fed’s benchmark rate to rise to 2.66% by year-end, from 0.33% today.

The dollar dropped 0.80% against the Japanese yen, on what appeared to be short-covering before the Bank of Japan concludes its two-day meeting on Thursday.

“There is a shift in sentiment and some concern in the market that officials are concerned about weakness and may take some measures,” said Neil Jones, head of FX sales, Financial Institutions at Mizuho in London.

Investors will be watching to see if the BOJ makes any changes to its yield curve control policy.

Japanese Prime Minister Fumio Kishida said on Tuesday that the government will aim to stabilise the currency with economic policy that reduces outflows of domestic income and boosts inflows of funds, but noted that the government must look at both the positive and negative impact a weak yen could have on the economy.

The Japanese currency also gained in line with a drop in US Treasury yields on Tuesday.

The British pound dipped 0.44% to $1.2684, after earlier reaching $1.2670, the lowest since July 2020.

Bitcoin dipped 1.66% to $39,789 and ether fell 2.24% to $2,938.

Comments

Comments are closed.