Jun 30, 2022 03:05AM ET
By: AnalysisWatch
The U.S. dollar stabilized in early European trading Thursday but is still near its two-year high, driven by safe-haven demand on renewed concerns about higher interest rates and a global recession.
At 3:05 AM ET, the dollar index, which tracks the greenback against a basket of six other currencies, was largely unchanged at 104.873, not far below its recent 20-year high of 105.79.
Falling U.S. bond yields slowed the dollar's advance on Thursday, but the greenback remains in demand as a safe haven as central bankers continue to stress the need to fight soaring inflation, even at the cost of a sharp slowdown in global growth.
EUR/USD rose 0.1% to 1.0442, with the single currency trying to regain its footing after losing nearly 0.8% against the dollar on Wednesday and heading for a monthly decline of 2.7% and a quarterly loss of 5.5%.
GBP/USD rose 0.2% to 1.2148, but the pound is still on track for its biggest six-month loss against the dollar, over 10%, after Bank of England Governor Andrew Bailey said the U.K. economy is starting to slow while inflation is expected to rise further, raising fears of stagflation.
The USD/JPY fell 0.2% to 136.35, retreating from a fresh 24-year high of just below 137.00 overnight, as the rift between a hawkish Fed and a dovish Bank of Japan continues to weigh heavily on the yen.
AUD/USD rose slightly to 0.6883, while USD/CNY fell 0.1% to 6.6975, helped by data showing China's factory activity expanded in June for the first time since February as authorities lifted COVID closures in major cities like Shanghai.
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