Dollar and yuan fell on protests against Covid restrictions in China

The dollar fell sharply against the Japanese yen on Monday, as investors focused on rare protests in China that pushed the yuan to a two-week low.

Protests against anti-COVID restrictions erupted across China and spread to several cities in the wake of a fire that killed 10 people in Urumqi, in the far west of the country, and hundreds of demonstrators clashed with police in Shanghai on Sunday night.

The yuan ended the local session down by 0.5 percent, recording 7.199 per dollar, its lowest closing level since November 10. The yuan fell in foreign transactions to more than its lowest level in two weeks in Asian trading, and recorded in the latest trading a decline of 0.28 percent to 7.214.

The Australian dollar fell 0.67% to $0.671.

The dollar fell in the latest trading 0.69 percent to 138.18 yen and touched earlier in the session 137.57, the lowest level since August 26.

The dollar also fell against the euro, which rose in the latest trading by 0.69 percent to $1.048, hovering around its highest level since late June.

The dollar has been falling over the past few weeks on hopes that the Federal Reserve will soon slow the pace of interest rate hikes, a view endorsed by the minutes of the bank’s November meeting published last week.

The dollar index began trading on Monday, on the rise, after closing on Friday at 106.05, but it declined in the latest trading by 0.76 percent to 105.53.

Federal Reserve Chairman Jerome Powell is scheduled to deliver a speech on the outlook for the US economy and labor market at an event at the Brookings Institution on Wednesday, which is likely to give more clues to the outlook for US monetary policy.