Dollar is recovering some of its losses amid continuing recession fears

On Thursday, the dollar recouped some of the losses it posted the day before, as investors focused on expectations of the Federal Reserve’s monetary policy path amid fears that higher interest rates could trigger a recession.

With the Bank of Japan holding long-term bond yields near zero, the yen weakened as long-term US Treasury yields fell from their lowest levels in three months.

Meanwhile, the yuan hovered near the highest level in nearly three months after China eased strict restrictions related to Corona.

The dollar index, which measures the currency against six other currencies, rose 0.19% to 105.33 in the Asian session, after falling 0.42% overnight, in what was its first drop since Friday.

Although investors were expecting the central bank to slow the pace of monetary tightening soon, recently published high US employment, services and factory data exacerbated uncertainty about the policy outlook.

The euro settled at $1.0505, while the British pound fell 0.18 percent to $1.2190.

The Euro recently rose on signs that the economic slowdown in Europe may not be as bad as previously feared. The European Central Bank is scheduled to review its policy on December 15th, and the Bank of England will set its policy on the same day.

The risk-sensitive Australian and New Zealand dollars fell slightly, with the Australian falling 0.16% to $0.67145 and the New Zealand 0.06% to $0.6353. They rose 0.56 and 0.61 percent, respectively, on Wednesday night.

The dollar increased 0.1% to 6.9670 yuan in offshore trading, making up for part of its 0.34% decline on Wednesday, when the Chinese government announced the easing of some COVID-19 restrictions that have severely undermined the economy’s performance.