TOKYO, Aug 16 (Reuters) - The safe-haven U.S. dollar reached
a fresh one-week high on Tuesday while the euro, Aussie and
Chinese yuan sank to new lows after weak global economic data
regnited recession fears.
The dollar index, which measures the greenback
against six major peers, rose as high as 106.62, its strongest
level since Aug. 8, before last trading 0.08% higher at 106.55.
Against the yuan, the dollar went high as 6.7950
at one point, a level last seen in mid-May.
The Australian dollar sank as low as $0.70005,
threatening to drop below the psychological 70-cent mark for the
first time since Wednesday.
New Zealand's kiwi dipped to $0.6349, also its
weakest since Wednesday.
Investors' latest move to the safety of the dollar came
after a raft of weak global economic indicators. Overnight data
showed U.S. single-family homebuilders' confidence and New York
state factory activity fell in August to their lowest levels
since near the start of the COVID-19 pandemic.
That followed surprisingly weak Chinese activity data
spanning industrial output, retail sales and fixed-asset
investment, the world's second largest economy was suffering a
faltering recovery from draconian COVID-19 lockdowns.
"The weakness in the U.S. and Chinese economies is typically
a bad sign for commodity currencies," Commonwealth Bank of
Australia strategist Joseph Capurso wrote in a note to clients.
"The path of least resistance for NZD is lower."
The Reserve Bank of New Zealand is widely expected to raise
rates by half a point again on Wednesday, with the focus on
whether policymakers follow the Federal Reserve and Reserve Bank
of Australia in shifting to a more data-driven approach.
The dollar index had retreated as low as 104.63 last week
for the first time since the end of June, after sliding from a
two-decade high at 109.29 in mid-July, as markets pared bets for
continued aggressive Fed tightening amid signs of a cooling in
the economy and inflation.
However in recent days, several Fed policymakers have spoken
of the need for continued rate hikes.
"Fed officials have no choice but to sound tough in the face
of a very, very tight labour market and far too-high inflation,"
Kit Juckes, the head of FX strategy at Societe Generale, wrote
in a research note.
"It's hard to build a compelling case to sell the dollar in
The euro, slipped to the weakest since Aug. 5 at
$1.0147 before trading little changed at $1.0158.
Sterling dropped as low as $1.2039 for the first
time since Aug. 5.
Against the yen, another haven currency, the
dollar was 0.07% higher at 133.375.
(Reporting by Kevin Buckland
Editing by Shri Navaratnam & Simon Cameron-Moore)