The US dollar rose to its highest level in two years and the yuan fell

The US dollar rose to a two-year high on Monday as a wave of risk aversion swept global markets, while the Chinese yuan was set to post its biggest three-day losing streak in nearly four years on growing fears of an economic slowdown in China.

With the war in Ukraine entering its third month and growing fears of the spread of COVID-19 across China causing Chinese stocks to slide, investors abandoned currencies such as the Australian dollar and the Chinese yuan.

The dollar index, which measures its performance against six major currencies, rose 0.6 percent to 101.62, a level last reached in March 2020. It is on track to achieve its biggest daily rise since March 11.

The Australian dollar, which was one of the biggest gains in the first quarter of 2022, fell thanks to higher commodity prices. It fell more than 1 percent against the US dollar and fell at a similar rate against the Swiss franc.

The Norwegian krone fell more than one percent against the dollar.

The euro’s meager gains were quickly wiped out after French President Emmanuel Macron’s election victory over his far-right rival Marine Le Pen, and the single currency fell 0.8 percent to $1.0729.

The hawkish comments made by several policymakers last week also raised the risks of global central banks tightening monetary policy. Money markets expect the Federal Reserve to raise interest rates by half a percentage point in the next two meetings. It expects the European Central Bank to raise interest rates by 25 basis points in July.

The Chinese yuan fell to its lowest level in one year.