Dollar retreats from two-month high, yuan gains

US dollar retreated today, Monday, from the highest level in two months, after gains for five consecutive weeks, as risk appetite improved in Europe and the focus shifted to the Jackson Hole meeting of central bankers scheduled to start on Friday.

According to “Reuters”, the dollar index, which measures the US currency against six other major currencies, fell in the latest trading by 0.2% to 103.18, but it is still close to its highest level in two months at 103.68, which it recorded on Friday.

“Risk appetite seems clearer than it has been in the past few weeks, which seems to be affecting the dollar,” said Michael Brown, market analyst at TraderX.

Federal Reserve Chairman (US Central Bank) Jerome Powell is expected to make remarks on Friday. His statements may determine the direction of US Treasury yields, which led to the rise of the dollar in the past weeks

Meanwhile, the Australian dollar reached $0.6420 and the New Zealand dollar reached $0.5926, levels close to the nine-month lows they hit last week.

And China cut the benchmark lending rate for a year by ten basis points and kept the five-year interest rate unchanged, while experts had expected a larger cut of up to 15 basis points for both.

The yuan fell in foreign trade to more than 7.3 per dollar before heading upwards, after Reuters reported that it was observed that Chinese state-owned banks were actively working to get rid of yuan liquidity abroad, in a move that raised the cost of short selling the currency.

The euro rose 0.3% to $1.0906. The pound sterling also recorded a slight rise to 1.2756 dollars, while the Swiss franc rose just above its lowest level in six weeks, which it recorded last week at 0.8793 per dollar.