Title: Dollar Up, Aussie Minimizes Losses as Risk Sentiment Slowly Improves
Mar 23, 2022 12:30AM ET
The dollar strengthened in Asia on Wednesday morning. The Australian dollar minimized its losses, while the Japanese yen continued its slide as investors slowly turn to riskier assets and rising commodity prices continued to drive market moves.
The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, rose 0.01% to 98.530 at 12:21 AM ET.
The USD/JPY pair rose 0.28% to 121.13.
The pair AUD/USD decreased 0.08% to 0.7461, and the pair NZD/USD decreased 0.08% to 0.6957.
The USD/CNY pair rose slightly by 0.03% to 6.3686 and the GBP/USD pair rose by 0.14% to 1.3282.
The Australian dollar hit its highest level against the yen since December 2015 and has gained 8% in March to date. It hit a four-and-a-half-month high in early trade after gaining 0.95% overnight. The yen fell as low as 121.4 per dollar, while the dollar gained 1.1% against the Japanese currency overnight.
The Australian dollar's breaking through resistance at $0.745 was due to gains in equities and commodities, analysts at ANZ told Reuters, adding that the outlook for the Australian currency continued to be driven by "global risk sentiment".
Stocks in the US and Asia-Pacific rallied on Wednesday as investors largely brushed aside concerns about the economic impact of the war in Ukraine, with the exception of commodities. Rising commodity prices will have a negative impact on the yen due to Japan's dependence on oil imports and will widen the country's trade deficit.
The Japanese central bank has already raised its key interest rate by 0.5% in its latest decision last week.
However, rising US yields have little impact on the dollar, as some investors believe that much of the increase is already priced in.