* Dollar retreats from 3-month highs amid Treasury yield
tumble
* Spread of Delta variant fuels worries about global
recovery
* Euro also firmer in face of dollar weakness as havens
sought
By Kevin Buckland
TOKYO, July 9 (Reuters) - The safe-haven yen and Swiss franc
stood tall on Friday, while risk-sensitive currencies including
the Australian and New Zealand dollars dipped to fresh
multi-month lows as investors turned cautious about the global
economic recovery.
Bonds have rallied while stocks took a hammering worldwide
amid growing concerns the fast-spreading Delta variant of
COVID-19 could derail a revival that is already showing pockets
of weakness.
The benchmark U.S. Treasury yield dipped to a
nearly five-month low of 1.25% overnight, before rebounding to
1.3433% in Asia. It was as high as 1.5440% just two weeks ago.
That decline in yields has pressured the U.S. currency. The
dollar index clawed back part of Thursday"s 0.36% slide,
rising less than 0.1% to 92.454. On Wednesday, it had pushed to
a three-month high of 92.844.
The euro held on to most of a 0.45% jump from
overnight, slipping less than 0.1% to $1.18355.
The yen changed hands at 109.915 per dollar,
weakening about 0.15% after the previous session"s 0.8% rally.
"There is certainly a wind of change in markets," with
concerns about inflation now shifting to concerns about growth,
Rodrigo Catril, a strategist at National Australia Bank, wrote
in a client note.
"There has not been a single catalyst triggering a turn in
sentiment, instead it seems that an accumulation of events,"
including the rapid spread of the Delta variant and perceptions
that central bank tightening could choke the recovery, he said.
Data on Thursday showed the number of Americans filing new
claims for unemployment benefits rose unexpectedly last week, an
indication that the labour market recovery from the COVID-19
pandemic continues to be choppy.
The Swiss franc held on to gains from Thursday,
when it soared more than 1%, to trade at 0.91525 per dollar.
The Aussie slipped a further 0.2% to $0.74175 after
earlier touching a fresh low for the year at $0.7410. On
Thursday, it posted a 0.7% decline.
New Zealand"s kiwi lost 0.1% to $0.69365, and
dipped as low as $0.6923, matching the weakest level since
November. It had plunged more than 1% in the previous session.
"The longer the reassessment of a global recovery continues,
the more these currencies will weaken," Commonwealth Bank of
Australia strategist Joseph Capurso wrote of the Antipodean
currencies in a research note.
"Our new forecasts predict weakness in these currencies for
the rest of the year," with Aussie falling to $0.72 and kiwi to
$0.6650, "but the risk is both currencies dip modestly below our
guidance," he said.
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Currency bid prices at 0446 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.1835 $1.1845 -0.07% -3.13% +1.1850 +1.1834
Dollar/Yen 109.9500 109.7750 +0.11% +6.40% +109.9600 +109.8000
Euro/Yen
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