(Bloomberg) -- The US dollar has erased more than half of this year's gains amid growing expectations the Federal Reserve will temper its aggressive rate hikes, and as optimism grows over China's reopening plans.
Most Read from Bloomberg
China's Covid Pivot Accelerates as Cities Ease Testing Rules
OPEC+ Latest: Group Agrees to Keep Oil Production Unchanged
OPEC+ Pauses as Russia Sanctions and China Covid Rules Roil Crude Markets
This Stock Strategist Says We'll See 5% Inflation for the Next Decade
Elon Musk Says Apple Is 'Fully' Advertising on Twitter Again
The Bloomberg Dollar Spot Index has pared its 2022 advance to about 7%, after gaining as much as 16% earlier, as slower-than-expected gains in consumer prices and comments by Fed Chair Jerome Powell stoked speculation the US central bank will slow its pace of rate hikes next week.
The gauge fell as much as 0.4% in Asian trading on Monday, hitting its lowest level since June 28 as risk currencies rallied. The gauge is set to fall a fifth day, the longest-losing streak since April 2021, after the Chinese cities of Shanghai and Hangzhou eased some Covid restrictions in a move toward reopening the world's second-largest economy.
"Anticipation of China reopening, Fed policy calibration are key thematics that should keep risk proxies such as commodity-linked currencies supported," said Christopher Wong, a currency strategist at Overseas Chinese Banking Corp in Singapore. "The strong non-farm payrolls report last Friday only saw a kneejerk bounce in the US dollar."
Most Read from Bloomberg Businessweek
11 Hours With Sam Bankman-Fried: Inside the Bahamian Penthouse After FTX's Fall
TikTok's Viral Challenges Keep Luring Young Kids to Their Deaths
Can Duolingo Actually Teach You Spanish?
Ryanair, EasyJet Scale Back in Germany Over Airport Fees
Forget Zoom Calls, Remote Work Startups Want to Build a Virtual Office
©2022 Bloomberg L.P.