The dollar is close to a two-year peak on the fears of “Covid” in China and the expectation of a US interest rate hike

Hong Kong/Archyde.com
The dollar held near a two-year high on Tuesday, as concerns about the economic impact of China’s anti-Covid-19 closures curbed the dollar’s safe-haven appeal while expectations of a US interest rate hike kept bond yields high.
The dollar index, which measures the performance of the US currency against six major currencies, fell 0.13 percent to 101.59 points, after reaching its highest level in two years at 101.86 last night.
The index has risen 3.3 percent since the beginning of the month, in what will be its largest monthly gain since November 2015.
“The bet for a further rise (for the dollar index) remains a good bet,” Westpac analysts said in a note. China’s growth risks are rising as the authorities continue their aggressive anti-Covid campaign, conditions in Ukraine remain volatile, and the Federal Reserve’s rhetoric remains as hawkish as ever.
However, the offshore Chinese yuan rose slightly to 6.5572 against the dollar after the People’s Bank of China said late on Monday that it would reduce the amount of foreign currency reserves that banks must hold.
This helped the currency recover from a one-year low of 6.609 per dollar hit yesterday, hit by concerns about economic growth in China.
Stock markets and US bond yields also rose on Tuesday amid an improvement in overall risk appetite.
The euro was at $1.0727, up 0.14 percent and down from a two-year low of $1.0697 hit on Monday, when the impact of market anxiety outweighed optimism for French President Emmanuel Macron’s re-election.
And the pound sterling recorded $ 1.2744, up 1.8 percent, after hitting its lowest level since September 2020 last night.
The Australian dollar rose 0.6 percent from a two-month low hit last night, after lockdowns in China affected commodity prices.
The dollar was little changed against the yen, reaching 128.16. The Japanese currency managed to recover slightly this week from a 20-year low of 129.40.
Bitcoin climbed slightly to $40,600, while Ether hit $3,000.
Researchers at cryptocurrency liquidity provider B2C2 said that trading in the cryptocurrency market is currently closely related to the stock markets, in the absence of any strong themes related to cryptocurrency.