Dollar falls but stays near previous week highs

Dollar falls but stays near previous week highs over China Evergrande concerns

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On Monday, the dollar fell in Asia but retained the value near the previous week’s highs due to China’s real-estate giant Evergrande (HK: 3333) concerns. The plight of Evergrande debt is still the biggest concern in the Asian markets. The latest U.S. job reports are also one of the reasons. 

The U.S. dollar index inched down 0.04% to 94.05. The U.S. dollar index tracks the greenback against the other currencies. The currency pair USD/JPY inched up 0.01% to 111.06. Other popular currency pairs also witness the movements in their combined values. The AUD/USD pair was up 0.02% to 0.7258, whereas the pair NZD/USD was down 0.07% to 1.3535. 

The currency pair USD/CNY was steady at 6.4467 as Chinese markets were closed due to a holiday. 

Shares of the China Evergrande group witnessed stagnation in Hong Kong on Monday morning. Analysts said investors feared Evergrande debt woes as there is no clear reason for the suspension. There was no immediate reason given which triggers the growing possibility of global contagion and can disrupt China’s property sector.

As of now, analysts stated that investors’ sentiments are going dull due to the Covid-19 backdrop. The collapse of Evergrande would severely hurt the fragile Chinese economy. A clear reflection of this plight can be seen in the popular currency pairs stated by the Foreign exchange market analysts. 

Sterling did well on Friday but is still moving on the negative side because of last week’s sharp downfall. It keeps feeding the inflation and risk of higher rates. The market can pull off the current situation as the growth stabilizes and the Covid-19 disruption goes away. 

A currency analyst in the UK said Evergrande’s debt risks were overwhelming for investors. And even if Evergrande’s concerns were resolved, there was a space of nervousness right then in the market. In addition, the U.S trade representative announced that China is not following the U.S. China trade rules, which can also be a reason for the dollar rise against the yuan.   


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