SINGAPORE (Reuters) – The dollar plummeted to gains Monday and the Japanese yen goes higher as U.S. economic data softens and global coronavirus issues rise keep investors cautious, while locks lock-ups and Italian political unrest keep the euro under pressure.
The euro fell to a six-week low of $ 1.2066 in Asia and fell to a one-month low of 125.20 yen. The yen last rose about 0.2% at 103.70 per dollar and also rose on risk-sensitive Australian and New Zealand dollars.
The Antipodeans were soft against the greenback and the Aussie hit a one-week pool of $ 0.7679, while the kiwi hit a three-week low of $ 0.7117. [AUD/]
Chinese economic data outperformed more than expected further sales, but it was not enough to move the sentiment of money traders.
The safety claim has added another round of support to the dollar since Democrats took control of U.S. Congress a fortnight ago, prompting a rise in yield as investors received a higher price from the Biden administration borrow and spend.
The sentiment recalled after Friday’s data showed that U.S. retail sales fell for the third straight month in December, worrying that the recovery is in trouble as health authorities warned that perhaps the latest COVID-19 wave is yet to come.
Europe is also facing urgent issues and the Italian government needs to live up to crucial votes in parliament on Monday and Tuesday to maintain power.
The dollar index rose after touching a month high and last traded at 90.827. Sterling on Monday sat near a week low of $ 1.3567.
Nonetheless, many investors seem to be sticking into full dollar shorts, which hit an almost 10-year level last week, even though the kick has been the dollar index carried around 1.9% higher and pushed the euro more than 2% lower in two weeks.
“The market is waiting a bit and seeing a mode of debate about the dollar, as to whether higher US yields could support or whether we will see a further decline,” said Singapore Bank money analyst Moh Siong Sim.
“I think risk balancing is still in favor of a relationship environment, so a sense of risk should be positive and we should see another decline in dollars. ”
Elsewhere, the Canadian dollar slipped 0.2% after reports that Joe Biden plans to delay approval for the Keystone XL pipeline soon, a project that would link oil sands in Alberta to refineries in Texas.
Later in the week, President Biden is expected to be elected in Washington with a strong defense. Tensions are high after mob violence a few weeks ago.
Biden’s election for Treasury Secretary Janet Yellen is expected to refuse to seek a weaker dollar when he tests Capital Hill on Tuesday, the Wall Street Journal reported.
Reciting with Tom Westbrook; Edited by Shri Navaratnam and Kim Coghill