Mon. Dec 5th, 2022

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Dollar softens as Georgia counts crucial Senate votes

1 min read

Dollar bills

The U.S. dollar took a breather from its steady descent but could not entirely escape selling pressure in Asia on Wednesday, as traders looked to the outcome of a Senate election in Georgia to drive the next move in market sentiment.

The dollar had dropped through a major support level against the Japanese yen on Tuesday and it briefly extended lower to a new 10-month low of 102.60 on Wednesday before steadying.

The euro also pulled back from a 32-month peak of $1.2328 made early in the Asia session as counting pointed to a close result in a poll that determines control of the U.S. Senate.

The Australian and New Zealand dollars kept pressure on the greenback and hovered just below multi-year highs, while sterling softened very slightly to $1.3614.

“The dollar is sort of undecided,” said Vishnu Varathan, chief economist at Mizuho Bank in Singapore, since investors are divided whether higher yields will be eventually eroded by higher inflation or flattered by lower inflation.

Against a basket of currencies the dollar index hit a fresh 2-1/2 year low on Wednesday before firming about 0.1% to 89.575. The benchmark 10-year Treasury yields rose above 1% for the first time since March.

Cryptocurrency bitcoin, sometimes seen as a hedge against inflation, rose more than 4% and hit a record high of $35,879.

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