TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Dollar on defensive as markets pin hopes on global economic recovery

Hideyuki Sano (Reuters)
Tokyo, Japan
Tue, June 2, 2020

Share This Article

Change Size

Dollar on defensive as markets pin hopes on global economic recovery An officer is arranging US dollars in one of the foreign currency exchange outlets in Jakarta, on Thursday March 19. 2020. Based on the Bank Indonesia Jakarta Interbank Spot Dollar Rate (JISDOR) reference rate data up to 18:00 WIB the exchange rate of the rupiah against the US dollar weakened to the position of Rp 15,712 per US dollar due to negative sentiment of the COVID-19 pandemic. (Antara/Indrianto Eko Suwarso)

T

he dollar was on the defensive on Tuesday as investors stuck to hopes of a global economic recovery despite heightened concerns over US-China tensions and mass protests in many US cities over the death of a black man in police custody.

The US dollar’s index against a basket of six major currencies stood at its weakest level since mid-March, at 97.790.

The euro fetched US$1.11295, little changed so far on Tuesday but holding near a 2-1/2-month high of $1.1154 touched on Monday.

Sterling traded at $1.2491, having hit a one-month high of $1.2506.

US manufacturing activity eased off an 11-year low in May and although the reading was weaker than forecast, it fit into markets’ expectations that the worst of the economic downturn was behind as businesses reopen.

“There are some potential flash points such as US demonstrations and China-US tensions. But, on the whole, the market is still moderately risk-on,” said Kyosuke Suzuki, director of forex at Societe Generale.

Against the safe-haven yen, the dollar was at 107.57 yen, stuck in a well-worn range between 106 and 108 over the last several weeks.

President Donald Trump said on Monday he was deploying thousands of heavily armed soldiers and law enforcement to halt violence in the US capital and vowed to do the same in other cities if mayors and governors fail to regain control of the streets.

The protests erupted over the death of George Floyd, a 46-year-old African-American who died in Minneapolis police custody after being pinned beneath a white officer’s knee for nearly nine minutes.

Market risk sentiment was hurt only slightly on Monday when Bloomberg reported that China had told state-owned firms to halt purchases of soybeans and pork from the United States, raising concerns that the trade deal between the world’s two biggest economies could be in jeopardy.

The Australian dollar, often seen as a proxy bet on the strength of the Chinese economy, fetched $0.6794, having reached its highest levels since late January.

The Reserve Bank of Australia is expected to keep rates on hold when it meets later on Tuesday.

The Chinese yuan stood flat at 7.1230 per dollar in offshore trade, near its highest levels in almost two weeks.

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.