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By Gina Lee
Investing.com – The dollar fell Monday morning in Asia, abandoning some past gains, as investors still assimilated THE speech of US Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium last Thursday.
Powell’s speech unveiled the Fed’s new technique for inflation, which was interpreted in the sense of low rates during a longer era.
The US dollar index tracking the dollar opposite a basket of other currencies fell 0.09% to 92,293 at 10:09 ET (3:09 GMT).
Some investors remained bearish, with Societe Generale strategists (OTC: SCGLY) Kit Juckes and Olivier Korber declaring in a note: “It is transparent to us that we are at the beginning of an era of several years of falling dollar, from very high levels …our doubts about whether the dollar can suffer a general decline amid threat aversion, global recession, and the specific weakness of emerging markets have been ignored by the Fed.
Meanwhile, investors will turn to speeches by some other Fed officials, and Vice President Richard Clarida and Atlanta Fed President Raphael Bostic are expected to speak later in the day for more clues about the Fed’s new inflation.
“This week you can see continued dollar weakness as the market looks for clues to the new frameworkArray … the end-of-month rebalancing may also lead to weakness at the beginning of the week.” Barclays analysts (LON: BARC) warned in their own note.
The USD/JPY pair rose 0.13% to 105.48.The yen posted profits after Sunday’s news that Abe’s leading cup secretary Yoshihide Suga was making plans to run for prime minister after incumbent Shinzo Abe announced Friday that he would resign due to health problems.Suga is expected to expand the fiscal and financial stimulus systems put in place under Abe.
The AUD/USD pair rose 0.05% to 0.7369. The NZD/USD pair dropped 0.04% to 0.6740, and Auckland exited the blockade Monday after the government announced that the COVID-19 outbreak in the city is under control.
The USD/CNY dropped 0.12% to 6.8563. Earlier in the day, China released a Manufacturing Purchasing Managers Index (PMI) of 51 and a 55.2 non-production PMI by August. Although the production PMI is lower than the forecast of 51.2 ready through Investing.com, the figures remained above the 50 mark indicating expansion.
GbP/USD drops by 0.04% to 1.3344.
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