Dollar rises after purchases on concern

The US dollar rose strongly against major currencies on Monday, November 21, at a time when the Chinese yuan fell as sentiment deteriorated due to the rise in coronavirus infections and the tightening of restrictions in some cities in the second largest economy in the world.

The Chinese capital, Beijing, recorded two deaths on November 20, while the city’s most populous district urged people to stay home on Monday, as COVID-19 infections soared.

The Chinese yuan recorded in internal trading 7.1451 per dollar, and fell to 7.1708, its weakest level since November 11.

The dollar index, which measures the performance of the US currency against 6 major currencies, rose 0.412% to 107.330 Monday, its highest level since November 11.

The index rose 0.5% last week, its biggest weekly gain in a month, as investors flocked to the safe-haven currency.

Despite the gains it made today, Monday, the index is still on track to record its worst monthly performance since July 2020.

Tighter comments from Federal Reserve officials helped the dollar stabilize after sharp losses earlier this month, when slightly lower-than-expected inflation data boosted investors’ hopes of a slowdown in rate hikes.

The euro fell 0.46% to $1.0277, heading for a 3-day streak of losses, near its lowest level since November 14, while the pound sterling last traded $1.1831, down 0.47% during the day.

The Australian dollar fell 0.49% against the dollar, to $0.664.

Cryptocurrencies remained under pressure, with Bitcoin dropping 0.63% to $16,153.00.