HONG KONG, Aug 16 – The dollar hit its highest level in three weeks on Tuesday, after weak global economic data reignited concerns of a global recession and renewed its appeal as a safe haven.
* The dollar index, which measures the greenback’s performance against six currencies, rose 0.4% to 106.94, its highest since July 27.
* The currency has fully recovered losses suffered last week, when weaker-than-expected inflation data in the United States sent investors away from the dollar and back into riskier assets.
* Risk appetite was hurt on Tuesday by falling German investor confidence, after China’s central bank unexpectedly cut a key interest rate on Monday to try to revive credit demand and support an economy affected by COVID after the publication of weak economic data for July.
* “The growth picture in the US remains intact, but the global picture remains fragile, given concerns about China, and that has curbed risk sentiment,” said Sim Moh Siong, currency strategist at the Bank of Singapore.
* The euro fell 0.35% to $1.0123, the British pound fell 0.26% to $1.202, and the Japanese yen fell 0.86% to 134.45 per dollar.
* The Japanese currency, which is often affected by the difference between benchmark yields in the United States and Japan, rose sharply last week on expectations that cooler inflation would imply a less aggressive pace of Fed tightening and , therefore, lower yields in the United States.
* However, in recent days, several Fed officials have spoken about the need to continue raising rates.
* Among cryptocurrencies, Bitcoin dipped slightly to $24,000. Ether was slightly higher at $1,900.