The dollar crept higher on Wednesday as some of the biggest U.S. banks warned of an impending recession, which dampened appetite for riskier assets and kept the greenback in demand.
http://bit.ly/3yhzgTFAgainst the dollar, sterling
GBPUSD
was last 0.03% lower at $1.2131, after falling 0.4% overnight.
The greenback rose 0.2% against the Japanese yen
USDJPY
to 137.30 yen, following a 0.16% overnight gain.
"We've been forecasting a recession in the U.S., the UK, the euro zone and Japan ... It's part of our baseline," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia.
"(That) will provide more support to the U.S. dollar, as a safe-haven currency."
Against a basket of currencies, the U.S. dollar index
DXY
edged 0.07% higher to 105.62.
This supported the view that while the Federal Reserve may scale back the pace of its rate hikes, U.S. rates will remain higher for longer.
Elsewhere, the euro
EURUSD
was last 0.08% lower at $1.0465.
The kiwi
NZDUSD
rose 0.13% to $0.6326.
In Asia, China's yuan firmed as the government announced a slew of measures that marked a sharp change to its tough, three-year-old zero-COVID policy that has battered its economy and sparked historic protests.
that asymptomatic COVID-19 cases and those with mild symptoms can self-treat while in quarantine at home.
While some of the changes echoed similar shifts made by other countries many months ago, the announcement was the strongest sign so far that China is preparing its people to live with the disease, though analysts say the path to fully reopening the economy will be long and bumpy, and not without risk.
The onshore yuan
USDCNY
was last more than 0.2% higher at 6.9771 per dollar.
"These are follow-up measures and reinforce the fact that China is taking calibrated steps in the direction of reopening," said Christopher Wong, a currency strategist at OCBC.
"Anticipation of further easing of measures in China should continue to favor RMB (and) RMB-linked assets."
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