The dollar extended its gains in early Monday trades in Asia as a holiday in Japan sapped liquidity, leaving China’s somewhat disappointing weekend stimulus announcements the focus of market attention. Alfexe | Istock | Getty Images
The dollar extended its gains in early Monday trades in Asia as a holiday in Japan sapped liquidity, leaving China’s somewhat disappointing weekend stimulus announcements the focus of market attention.
The euro was down 0.13% at $1.0922 and the pound nearly 0.2% lower at $1.3043. The dollar was flat on the Japanese yen at 149.20.
The dollar index was at 103.10, up a touch and closing in on last week’s peak, its highest since mid-August, on the back of traders reducing bets on further jumbo rate cuts by the Federal Reserve at its remaining meetings this year.
Ahead of the onshore market opening, the yuan was down more than 0.2% against the dollar, while the Aussie, whose fortunes are closely tied to China, was down 0.16% at $0.67385.
China said on Saturday it will “significantly increase” government debt issuance to offer subsidies to people with low incomes, support the property market and replenish state banks’ capital as it pushes to revive sputtering economic growth.
Without providing details on the size of the fiscal stimulus being prepared, Finance Minister Lan Foan told a press conference there will be more “counter-cyclical measures” this year.
“Markets are likely disappointed that China’s Finance Ministry did not unveil concrete additional stimulus,” said Richard Franulovich, head of FX strategy at Westpac, in a note.
“The weekend press briefing mostly just reinforces our existing expectations that China’s policy pivot is worth a one-time 3-4 cents lift in the Australian dollar’s equilibrium, of which about half has already been priced in.”
Further moves are unlikely,
