SINGAPORE – The dollar clung to recent gains on Wednesday as virus woes raised concerns in a market already on edge ahead of US jobs data seen as crucial to the Federal Reserve’s monetary policy outlook.
Risk-sensitive commodity currencies had led overnight losses, with the Australian and New Zealand dollars each dropping about 0.7 percent. The euro fell 0.2 percent overnight while the safe-havens of Japanese yen and the Swiss franc held steady.
Morning trading in Asia did not move majors much from those levels, with the euro last at $1.1902 and the yen at 110.58 per dollar. The Aussie bought $0.7517.
“There’s a bit of a bearish tilt to currencies,” said Westpac analyst Sean Callow. “It’s the line you would expect on a risk-off day, and maybe it’s a bit of insurance ahead of payrolls,” he added, referring to US labor data due Friday.
The dollar index rose 0.2 percent to hit a one-week high overnight and on Wednesday sat roughly in the middle of the range it has found in the wake of the surprisingly hawkish shift in tone from the Fed earlier this month.
The risk-averse mood was underpinned by a fresh spike in global coronavirus infections and in restrictive measures to contain them which threaten to set back the pandemic recovery.
Case counts are hitting daily records in Indonesia, lockdowns are being extended in Malaysia and expanded in Australia, while travellers from Britain are facing new restrictions as the contagious delta variant spreads. – Reuters
