Dollar Falls on Optimism Over China’s Economic Recovery
The US dollar fell on Monday as investors worried about the currency’s uncertain future under the Federal Reserve’s hawkish stance. On the flip side, market participants were optimistic that China’s easing of lockdowns could improve global trade.
US stock futures rose as positive sentiment was revived by a statement from President Biden that he’s considering lowering tariffs on some products imported from China.
Meanwhile, the USD index, which was hovering near a two-decade high in the first half of May, has shed almost 2% in a week. The American currency may be losing steam given Europe’s aim of weaning itself off Russian fossil fuels and China’s economic reopening after its strict city-wide lockdowns.
Indeed, the yuan performed well last week and steadied to 6.6844 per dollar on Monday. Commodity-linked currencies Aussie dollar and New Zealand dollar edged up as investors banked on a brighter economic outlook.