The U.S. dollar posted a big jump on Monday, strengthening to a high of one last week due to slower economic growth in China and stronger U.S. treasury yields. These factors have driven demand for the US dollar and less demand for the Japanese yen.
In addition, there are 3 important data that investors refer to, namely strong inflation data in New Zealand, hawkish comments from the Bank of England and slow growth in China have re -emphasized the issue of rising inflation and slow growth in global markets.
Investors ’decisions at this point mostly revolve around the issue of inflation by responding to the demand for the U.S. dollar against major currencies and at the same time investors are reducing their purchases of commodity currencies such as the yen.
According to investor strategist Raffi Boyadijan, higher treasury yields combined with weak China’s GDP data spurred demand for the U.S. dollar and other safe haven currencies on Monday.
U.S. Treasury Revenue strengthened on Monday extending the trend in recent weeks with five -year bond yields rising to their highest level since February 2020 as investors raised bets that the U.S. Federal Reserve is preparing to raise interest rates as early as next year.
The inflation outlook also spurred expectations of an earlier tightening of global monetary policy, with Danske Bank expecting a total of two rate hikes from the Fed in the second half of next year.
According to HSBC analysts, these 2 factors will determine the direction of the US dollar, namely global economic growth and the determination of interest rate hikes.
The US dollar index strengthened 0.1% to 94.05, a rise to last year's high of 94.563 in September 2020. The yen slipped to a three -year low against the US dollar at 114.36.
The Kiwi currency jumped nearly 0.5% to a one -month high of $ 0.7105 before falling back to $ 0.7056 after a decade -high quarterly inflation reading.
In other data highlights, China’s economic growth reached its slowest level in a year in the third quarter.
