The dollar struggled to progress on Tuesday, while an unprecedented increase in its Taiwanese counterpart for two days has passed on to the other currencies in the region and highlighted the fragility of the American currency.
Hong Kong Central Bank said it earned $ 7.8 billion ($ 60.5 billion HK dollars) earlier in the day to prevent local currency from appreciating and breaking an anchoring in the US dollar.
Investors also expected concrete progress in trade negotiations with the United States and signs of a thaw in Sino-American relations, rather than simple allusions on the part of officials.
The Taiwanese dollar reached its highest level on Monday in three years, at 29.59 for a dollar, after jumping 8 % in two days, in a context marked by the end of commercial negotiations between the United States and Taiwan in Washington. He finally stabilized at 30.02 for a dollar.
“If this development is due to coverage operations on the part of long-term investors, the question that many are asking to know if these countries, whose currencies are historically” weak “and highly controlled, now seek to seduce Trump through their currency and authorize an assessment of it in the context of commercial negotiations,” said Chris Weston, director of research at Pepperston.
Such an agreement has been denied several times by the Taiwanese central bank, but the market is not entirely convinced and considers that the increase in the Taiwanese dollar benefits from its tacit agreement and that it should be well received by the United States.
Currents such as the Australian dollar and the Yen also took advantage of this situation, the Australian dollar recently oscillating near its highest level in five months, reached Monday at 0.6449 dollars.
The Yen was slightly weakened at 143.99 for a dollar, but that follows an increase of 0.9 % during the night.
The Chinese yuan has strengthened to reach its highest level since March 20, at 7.23 for a dollar, after reopening the markets after a long break.
These movements have further strengthened the idea that investors turn away from the US dollar, due to President Donald Trump’s chaotic pricing policy on a global scale.
“The yields of American treasury bills have practically returned to their level before the” Liberation Day “, but the US dollar remains significantly lower,” said Carol Kong, a strategist in currency at Commonwealth Bank of Australia.
“I think it simply shows that the markets remain uncertain about the status of refuge value of the US dollar … The investors hesitate to place their money in the US dollar. »»
Faced with a basket of currencies, the dollar increased from 0.2 % to 100.04. The Dollar Index recorded a monthly drop of 4.3 % last month, the largest in more than two years.
The American federal reserve announces its monetary policy decision on Wednesday and should maintain its rates unchanged, but this meeting could be the last where the result is also clear.
Elsewhere, the euro fell 0.25 % to 1.1287 dollars, while the pound sterling fell 0.24 % to 1.3265 dollars.
The New Zealand dollar fell 0.3 % to $ 0.5,949.
The Bank of England is also meeting this week and is expected to lower its interest rates by a quarter of a point on Thursday, while the customs duties imposed by Mr. Trump are dating the prospects for global growth. Central banks in Norway and Sweden should maintain their unchanged rates. (Rae weekend report, edited by Shri Navaratnam)
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