FOREX-Dollar near 9-month highs on COVID-19 worries; Aussie, wilting kiwi
Band Kevin Buckland
TOKYO, August 23 (Reuters) – The safe haven dollar traded near its highest for more than nine months against its major peers on Monday, as commodity currencies like the aussie languished amid fears the Delta coronavirus variant could derail the recovery global economy.
The dollar index = USD, which measures the currency against six peers, was little changed at 93.468 from Friday, when it climbed to 93.734 for the first time since November 4.
An increase in the number of COVID-19 cases has prompted the Federal Reserve to move its annual symposium in Jackson Hole, Wyoming to an online format to be held this Friday, raising questions about the central bank’s broader assessment of the economic impact of the Delta variant as it heads towards a tapered relaunch.
Fed Chairman Jerome Powell, who has so far largely played down the repercussions, delivers a speech at the economic outlook event.
The dollar was also supported by speculation that the Fed may start easing asset purchases this year, but a delay would not necessarily damage the currency, according to the National Australia Bank (NAB).
“This can play just as well on the USD positive as it is negative, from a USD risk / demand safe haven sentiment perspective,” said Ray Attrill, head of foreign exchange strategy at NAB.
Meanwhile, rising infections and new restrictions in Australia and New Zealand keep those currencies heavy, he wrote.
“It is still premature to stop this decline” in the Aussie, said Attrill.
The Australian AUD = D3 edged up 0.1% to $ 0.7145, but remained close to Friday’s 9-1 / 2 low of $ 0.71065. About 60% of Australia’s population of 25 million is now in lockdown, with infections at an all time high.
New Zealand Kiwi NZD = D3 slipped 0.09% to $ 0.6834, approaching the 9 1/2 month of $ 0.6807 reached on Friday as the country struggles to contain a new outbreak.
Asia-Pacific has been hit particularly hard by the fast-spreading Delta variant, with vaccinations overdue in places like the United States and Britain.
In addition to Australia and New Zealand, South Korea and Vietnam have extended or tightened restrictions, while Japan has changed its strategy by tripling COVID-19 tests as new daily infections hit a record high on Friday .
Yen JPY = EBS, another safe haven, was virtually unchanged at 109.835 per dollar, consolidating in the middle of the last month and a half trading range.
The euro EUR = EBS was almost flat at $ 1.1697, up from Friday’s 9.5-month low of $ 1.1664.
The Canadian dollar tied to oil CAD = D3 weakened about 0.1% to C $ 1.2818 per greenback. It plunged to an eight-month low of C $ 1.2949 at the end of last week.
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(Reporting by Kevin Buckland; Editing by Christopher Cushing)
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