Greenback gains, Aussie tumbles after weak Chinese data

　　The safe-haven U.S. dollar bounced on Monday while commodity-sensitive currencies including the Australian dollar tumbled after a new batch of disappointing Chinese data bolstered global recession worries.

　　Commodities including iron ore slumped on concerns about reduced demand from China, which hurt currencies exposed to the assets, including the Australian dollar.

　　“Concern about Chinese demand for commodities…at the margins its probably encouraging a risk off attitude,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

　　The U.S. dollar index gained 0.79% to 106.52. The euro eased 0.97% against the dollar to $1.0157.

　　The Australian dollar, which is also viewed as a proxy for global growth, dropped 1.43% to $0.7021. The New Zealand dollar fell 1.45% to $0.6363.

　　The offshore yuan hit 6.8197, the weakest since May 16, after Chinas central bank cut key lending rates in a surprise move to revive demand.

　　The dollar index has fallen from a 20-year high of 109.29 on July 14 on hopes that the Federal Reserve will slow its aggressive pace of rate increases and that the worst of inflation increases may be behind us.

　　Concerns that the Fed tightening will send the economy into recession has also sent U.S. Treasury yields lower.

　　However, Fed officials have maintained a hawkish tone and stressed it is too soon to declare victory on inflation.

　　“The Fed is telling us they want to tighten financial conditions and the market has eased them, so the Fed is going to have to drive home its point with a larger rate hike,” said Chandler, adding he expects the U.S. central bank to raise rates by 75 basis points at its September meeting.

　　Data this week including industrial production on Tuesday and retail sales on Wednesday could also “help ease fears that the U.S. contracted again,” Chandler said, which would boost the greenback.

　　U.S. single-family homebuilders confidence and New York state factory activity fell in August to their lowest levels since near the start of the COVID-19 pandemic, data on Monday showed.

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　　Currency bid prices at 3:02PM (1902 GMT)

　　Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

　　Previous Change

　　Session

　　Dollar index 106.5200 105.7000 +0.79% 11.349% +106.5500 +105.5400

　　Euro/Dollar $1.0157 $1.0257 -0.97% -10.66% +$1.0270 +$1.0155

　　Dollar/Yen 133.3250 133.6100 -0.22% +15.80% +133.5850 +132.5550

　　Euro/Yen 135.42 136.93 -1.10% +3.91% +137.0700 +135.2900

　　Dollar/Swiss 0.9468 0.9411 +0.63% +3.82% +0.9471 +0.9409

　　Sterling/Dollar $1.2055 $1.2135 -0.66% -10.87% +$1.2148 +$1.2051

　　Dollar/Canadian 1.2908 1.2773 +1.07% +2.11% +1.2934 +1.2774

　　Aussie/Dollar $0.7021 $0.7122 -1.43% -3.43% +$0.7125 +$0.7012

　　Euro/Swiss 0.9618 0.9653 -0.36% -7.24% +0.9663 +0.9614

　　Euro/Sterling 0.8424 0.8451 -0.32% +0.29% +0.8470 +0.8420

　　NZ $0.6363 $0.6456 -1.45% -7.05% +$0.6456 +$0.6357

　　Dollar/Dollar

　　Dollar/Norway 9.7115 9.5785 +1.18% +10.02% +9.7150 +9.6040

　　Euro/Norway 9.8654 9.8095 +0.57% -1.47% +9.9042 +9.8188

　　Dollar/Sweden 10.3468 10.1833 +0.53% +14.74% +10.3497 +10.1907

　　Euro/Sweden 10.5105 10.4550 +0.53% +2.70% +10.5330 +10.4644