Aussie jumps, safe-haven dollar and yen ease amid Shanghai reopening signs

Thursday,   19-May-2022   11:14 AM (IST)

The safe-haven dollar and yen eased on Thursday while the Australian and New Zealand dollars jumped amid signs of an easing in Shanghai's coronavirus lockdown, although sentiment remained fragile as global equities sold off. Shanghai will allow more businesses in some areas to resume normal operations from the start of June, an official said, stirring hopes for an end to a crippling weeks-long lockdown under the government's strict zero-COVID policy. That helped lift the mood in a market that was badly bruised on Wednesday by mounting concerns that aggressive tightening by the Federal Reserve and other global central banks could choke growth. The Aussie gained 0.8% to $0.7008, just above the psychologically important 70 cent level, getting additional support from a tick down in Australian unemployment to the lowest in almost half a century. Overnight, the currency had retreated 1.1% from a high of $0.7046. New Zealand's kiwi bounced 0.6% to $0.6334, after losing 1.1% overnight from a top of $0.6370. Preeminent haven currency the yen slid, with the dollar adding 0.48% to 128.845 yen after a 0.86% tumble on Wednesday. The dollar index , which tracks the greenback against six major peers, edged 0.16% lower to 103.63, after a 0.55% jump overnight that ended a three-day losing streak. Poor U.S. housing data on Wednesday added to slowdown concerns, and Fed Chair Jerome Powell had ratcheted up the hawkish rhetoric the previous day by saying the U.S. monetary authority would push interest rates as high as needed to stem a surge in inflation that he said threatened the foundation of the economy. The euro rebounded 0.38% to $1.0501 after Wednesday's 0.84% slump. Sterling got some respite with a 0.37% gain to $1.23905, after dropping 1.2% overnight as a surge in U.K. inflation to a 40-year record fostered worries for a sharp economic slowdown.