USD stabilizes as optimism about China easing Corona restrictions declines

The dollar stabilized on Thursday after long-term US Treasury yields rose overnight, as initial optimism about China easing coronavirus restrictions and opening up the economy waned.

After China removed its quarantine rule for inbound travellers on January 8, countries such as the United States, Japan and India said they would require COVID-19 tests for people arriving from China.

The speed with which China scrapped COVID-19 rules has overwhelmed its fragile health system and raised concerns about the spread of the virus.

The Japanese yen rose nearly 0.5 percent to 133.83 yen per dollar.

The pound rose 0.19 percent to $1.2040, but it was not far from its three-week low of $1.1993 last week.

The euro rose 0.15 percent at 1.0628 dollars.

Uncertainty about the global economic outlook, as well as growing concerns about a recession in the United States, drove down the two-year US Treasury yields, which usually move according to interest rate expectations, last night. It amounted to 4.3512 percent.

Meanwhile, the yield on the benchmark US Treasury bond for ten years reached 3.8656 percent, after rising to the highest level in more than a month at 3.8920 percent last night.

The dollar index, which measures the performance of the US currency against a basket of currencies, settled at 104.28.

The Australian dollar rose 0.16 percent to $0.6751, while the New Zealand dollar advanced 0.33 percent to $0.6331.

The offshore Chinese yuan rose slightly to 6.9932 per dollar.

In the cryptocurrency market, Bitcoin rose 0.13 percent to $16,561, while Ether rose 0.26 percent to $1,192.60, although both are on track to drop more than 60 percent this year.