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US dollar erases more than half of 2022’s gains on rates

Bloomberg

The US dollar has erased more than half of this year’s gains amid growing expectations the Federal Reserve will temper its aggressive rate hikes, and as optimism grows over China’s reopening plans.
The Bloomberg Dollar Spot Index has pared its 2022 advance to about 7%, after gaining as much as 16% earlier, as slower-than-expected gains in consumer prices and comments by Fed Chair Jerome Powell stoked speculation the US central bank will slow its pace of rate hikes next week.
The gauge fell as much as 0.4% in Asian trading, hitting its lowest level since June 28 as risk currencies rallied.
The gauge is set to fall a fifth day, the longest-losing streak since April 2021, after the Chinese cities of Shanghai and Hangzhou eased some Covid restrictions in a move towards reopening the world’s second-largest economy.
“Anticipation of China reopening, Fed policy calibration are key thematics that should keep risk proxies such as
commodity-linked currencies
supported,” said Christopher Wong, a currency strategist at Overseas Chinese Banking Corp in Singapore.

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