Dollar Rebounds as China Worries About Coronavirus Spreading to Markets By Reuters

Written by Saqib Iqbal Ahmed

NEW YORK (Reuters) – The dollar rose against most major currencies on Monday, rebounding from recent losses, as new COVID-19 restrictions in China fueled concerns about the global economic outlook and caused traders to move away from riskier currencies.

* The Chinese capital warned on Monday that it was facing its most severe test in the COVID-19 epidemic, closing businesses and schools in the worst-hit areas and tightening entry rules for the city, as infections surged in Beijing and around the world. the National.

* New cases have cast doubt on hopes that the government will soon be able to ease its tough restrictions. This has boosted the dollar, which is seen as a safe-haven asset in times of trouble.

– The dollar rose 0.9 percent against the yen to 141.665 units, its biggest daily gain since October 14. The euro fell 0.74% to $1.0248.

* “All eyes today are on China and its anti-COVID policy. Traders fear that China could expand its restrictions, which could slow growth and threaten higher inflation,” said John Doyle of Monex USA. “The concern is felt across all asset classes.”

* The local yuan opened at 7.1451 per dollar and fell to a low of 7.1708, the lowest since November 11.

* Investors cast a dim view of riskier currencies, as the Australian dollar – considered a liquid measure of risk appetite – fell 0.8% to its lowest level in more than a week at $0.6,617.

* Analysts attribute part of the dollar’s strength to a rebound after the aggressive sell-off in recent weeks, which sent the dollar down 4.7% in November. The measure continues to accumulate at an increase of 12% on the year.

(Edited in Spanish by Carlos Serrano)