By Gina Lee
Investing.com – The dollar was down on Monday morning in Asia, with the AUD and NZD suffering losses amid mounting fears of a second wave of COVID-19 cases.
China saw a fresh cluster of cases linked to Beijing’s Xinfadi market over the weekend, reporting 57 cases on June 13.
Neighbor Japan also reported 47 cases in Tokyo, with 27 of those cases traced back to nightclubs and bars that had recently reopened in the last phase of the city’s re-opening.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.22% to 97.118 by 11:21 AM ET (4:21 AM GMT).
U.S. Federal Reserve Chairman Jerome Powell is largely expected to reiterate the gloomy picture of the U.S. economy in his semi-annual policy report to the Congress later this week.
The USD/JPY pair was down 0.11% to 107.22 before a Bank of Japan policy meeting ending Tuesday.
The bank is not expected to announce any major changes.
The AUD/USD pair lost 0.48% to 0.6829 and the NZD/USD pair lot 0.36% to 0.6421. The two Antipodean risk currencies were the biggest casualties of the increased second-wave fears due to their close ties with the Chinese economy as well as global commodities.
“There’s talk that hedge funds and other short-term speculators came into the market early to sell the Australian dollar because of the new infections in Beijing...hopefully this will not be a big outbreak, and this downward move will not last long,” Yukio Ishizuki, foreign exchange strategist at Daiwa Securities, told Reuters.
The USD/CNY pair gained 0.10% to 7.0877 even after the release of Chinese industrial production and retail sales data for May that fell short of investor forecasts.
Industrial production rose 4.4% year-on-year and retail sales declined 2.8% year-on-year.
The GBP/USD pair fell 0.19% to 0.2517, with the Bank of England policy decision schedule due on Thursday.
The central bank is expected to increase its quantitative easing program by around GBP100 billion ($125.306 billion), with some forecasts predicting even larger increases as Britain’s economy slowly recovers from the effects of COVID-19.
The GBP also suffered losses after it was reported that Britain will not extend the deadline for trade talks with the European Union beyond the end of 2020, amid fears of the British economy descending into chaos if an agreement is not reached.