Dollar gains for second day on Afghanistan, Delta variant worries
The dollar advanced for a second straight session on Tuesday, bolstered by safe-haven demand, as investors fretted about Afghanistan, a slowing Chinese economy, and the rapid spread of the Delta coronavirus variant which forced some lockdowns.
The Afghan Taliban said on Tuesday they wanted peaceful relations with other countries and would respect the rights of women within the framework of Islamic law, as they held their first official news briefing since their shock seizure of Kabul.
Many investors, however, were not comforted by the Taliban’s conciliatory tone.
In afternoon trading, the U.S. dollar index rose 0.6% to 93.119. The euro, the biggest component in the dollar index, fell 0.6% to $1.1709.
U.S. Treasury Yields end little changed after mixed data, COVID concerns remain.
Benchmark 10-year note yields were last at 1.258%, little changed on the day, after earlier falling as low as 1.217%. Analysts said that trading has been volatile with many investors and traders on holiday for the second half of August.
The safe-haven Japanese yen was down against a firm dollar, which rose 0.3% to 109.56 yen. The Swiss franc, another safe haven, also fell versus the dollar, which was last up 0.3% at 0.9149 franc.
Investors are looking to Wednesday’s minutes of the Federal Open Market Committee meeting last month, as several Federal Reserve officials have adopted a more hawkish outlook in recent weeks.
That hawkish view, however, does not take into account the most current data releases, which have come in weaker than expected, such as the poor confidence numbers amid the surge in Delta variant cases and the renewed rise in mitigation measures that could slow growth.
Reference: Reuters
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