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Dollar Up Despite Concerns Over Economic Recession

Published 28/06/2022, 05:12
© Reuters
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By Zhang Mengying

Investing.com – The dollar was up on Tuesday morning in Asia despite worries about economic recession. Investors await a speech from the European Central Bank (ECB) President Christine Lagarde.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched up 0.02% to 103.96 by 11:21 PM ET (3:21 AM GMT).

The USD/JPY pair edged down 0.13% to 135.26.

The AUD/USD pair inched down 0.04% to 0.6920, and the NZD/USD pair edged down 0.12% to 0.6292.

The USD/CNY pair inched up 0.09% to 6.6978, while GBP/USD pair inched up 0.07% to 1.2272.

Governor of the People’s Bank of China Yi Gang said the central bank will keep its policy supportive for China's economy.

Investors are keeping an eye on signs of weakness in recent economic data, which would possibly moderate interest rate hikes. But they are also concerned that it could be a sign of the onset of a difficult period of stagflation.

"Stay long the dollar until some of the uncertainty has reduced," Societe Generale) strategist Kit Juckes told Reuters.

"The dollar will fall likely only when the global economy is on a more sustainable growth path ... markets are forward-looking, but all we can see ahead today is danger.”

Across the Atlantic, German inflation figures are due on Wednesday, and French data is due on Thursday.

"This set of inflation data will have a significant influence on the ECB's monetary policy forward guidance, especially on the trajectory ... of its interest rate hike cycle that is expected to kick start in July," CMC analyst Kelvin Wong told Reuters.

The ECB President Christine Lagarde, U.S. Federal Reserve Chair Jerome Powell, the Bank of England Governor Andrew Bailey, and Cleveland Fed President Loretta Mester are due to speak at the ECB forum in Sintra, Portugal this Wednesday.

The Group of Seven (G7) leaders are about to discuss the means to tackle rising energy prices. They are examining a new package of actions aimed at increasing pressure on Russia over its war in Ukraine.

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