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The US dollar stabilized near its lowest level in five months in early trade in London on Wednesday, while the New Zealand dollar rose by more than 1% in light of the country’s central bank hinting at the possibility of a rate hike in September 2022.
The dollar index recorded 89.745 after losses in the past two months, with investors expecting the low interest rate in the United States to push liquidity out of the country to grab gains from other countries recovering from the pandemic.
Federal Reserve officials have confirmed that they will not change the ultra-accommodative monetary policy soon.
In contrast, the Reserve Bank of New Zealand surprised many market participants by anticipating a possible rate hike in September next year.
The New Zealand dollar jumped to its highest level in three months after the news and clung to its gains during Asian trading. It rose 1.2% to 0.70309.
The Australian dollar rose 0.3% to 0.7778.
The exchange rate of the Chinese yuan at home and abroad rose to its highest level in three years against the dollar. The currency surpassed in internal transactions 6.40, which is a significant level psychologically, registering 6.3913.
The Japanese currency settled at 108.845 yen against the US dollar.
The euro fell slightly against the US dollar, losing 0.1% to $1.22385, but remains close to its highest level since January.
