FOREX-Yen, dollar rise as Delta variant spurs rush to safety

  • 7/20/2021
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* Aussie drops amid bets RBA may reverse taper decision * Yen helped by steep drop in U.S. Treasury yields * Bitcoin falls below $30,000 for first time in a month By Kevin Buckland TOKYO, July 20 (Reuters) - Safe-harbour currencies like the yen and dollar traded near multi-month highs against the riskier Australian dollar and British pound on Tuesday, as fears grow that a rampant coronavirus variant could upend the global economic recovery. Cryptocurrencies also sank, with bitcoin falling below $30,000 for the first time in about a month. The yen traded at 80.09 per Aussie dollar, close to the more-than-five-month high of 80.05 touched on Monday. It stood at 149.48 to the pound, approaching the almost-three-month top of 149.35 reached overnight. The dollar touched an almost-eight-month high of $0.7317 per Aussie on Tuesday before trading at $0.7319, and changed hands at $1.36625 to sterling after hitting the highest since early February at $1.3655 in the previous session. The Aussie accelerated declines as minutes of the Reserve Bank of Australia"s policy meeting this month were seen by some economists as a sign the central bank may reverse a decision to taper stimulus. The yen outpaced the dollar, rising to 109.07 per greenback on Monday for the first time since late May, helped by a precipitous slide in benchmark U.S. Treasury yields to as low as 1.1740% for the first time since mid-February. On Tuesday, one dollar bought 109.46 yen. The fast-spreading Delta variant of the coronavirus is now the dominant strain worldwide, and has been accompanied by a surge in infections around the United States, particularly in areas where vaccinations have lagged. Meanwhile, Boris Johnson"s "freedom day" - ending over a year of COVID-19 lockdown restrictions in England - was marred by surging infections and the British prime minister"s own forced self-isolation after Health Minister Sajid Javid tested positive for the virus. In Australia, nearly half the country"s 25 million people is living under lockdowns to quell an outbreak of the Delta variant. "What is likely concerning markets now is ... a surge in infections occurring in developed markets with high levels of vaccination," National Australia Bank analyst Tapas Strickland wrote in a client note. "That suggests virus restrictions may need to be in place for longer," delaying the global recovery, he said. The euro weakened 0.1% to $1.17885, after dipping overnight to the lowest since early April at $1.1764. The European Central Bank announces policy on Thursday, with market participants keen to see how the monetary authority implements changes to its strategy unveiled earlier this month. "The ECB (is) expected to reinforce its dovish policy settings at this week’s policy meeting," giving the euro scope to soften in coming months, Rabobank strategist Jane Foley wrote in a research note. At the same time, the dollar is likely to remain supported by safe-haven demand, pushing the euro toward $1.17 by year-end, she said. In cryptocurrencies, bitcoin sank as low as $29,500, a level not seen since June 22, before trading 4.1% lower at $29,559.10. Rival ether dropped 4.8% to $1,730.33, also nearing a one-month low. ======================================================== Currency bid prices at 0434 GMT Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar $1.1790 $1.1800 -0.08% -3.50% +1.1802 +1.1789 Dollar/Yen 109.4150 109.4600 -0.03% +5.94% +109.6000 +109.3750 Euro/Yen Dollar/Swiss 0.9183 0.9181 -0.01% +3.76% +0.9188 +0.9180 Sterling/Dollar 1.3666 1.3673 -0.04% +0.04% +1.3689 +1.3661 Dollar/Canadian 1.2759 1.2746 +0.13% +0.22% +1.2765 +1.2733 Aussie/Dollar 0.7323 0.7348 -0.33% -4.80% +0.7357 +0.7317 NZ 0.6910 0.6944 -0.49% -3.77% +0.6954 +0.6906 Dollar/Dollar All spots Tokyo spots Europe spots Volatilities Tokyo Forex market info from BOJ (Reporting by Kevin Buckland Editing by Shri Navaratnam and Sam Holmes) Our Standards: The Thomson Reuters Trust Principles.

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