Dollar hits more than one-month high on China fears

WASHINGTON/LONDON: The US dollar hit more than a one-month high on Monday as investors sought a safe haven due to concerns about China’s economy, and traders braced for possible Japanese government intervention after the yen hit its lowest level since November.

The dollar index, which tracks the currency against its major peers, was up 0.36% to 103.23, its highest level in more than a month.

Analysts said investors bought the dollar as shelter from concerns about the health of the global economy, particularly China.

A source told Reuters that Country Garden, China’s largest private developer, is seeking to delay payment on a private onshore bond for the first time, in a new sign of stress in the sector.

Meanwhile, two Chinese listed companies said at the weekend they had not received payment on maturing investment products from asset manager Zhongrong International Trust Co.

“A lot of traders are focusing again on China,” said Edward Moya, senior market analyst at OANDA. “I think there’s so much concern with just their growth outlook, with their current property crisis, and I think one of the biggest wealth managers not being able to make debt obligations is a big red flag.”

Japan’s yen was trading at its lowest level since November at 145.35 per dollar, with the dollar up 0.26% against the currency.

The Bank of Japan has stuck to its ultra-loose monetary policy as other global central banks hiked interest rates, making returns in other countries look more attractive and weighing heavily on the yen.

Japan intervened in currency markets last September when the dollar rose past 145 yen, prompting the Ministry of Finance (MOF) to buy the yen and push the pair back to around 140 yen. The yen is down nearly 10% against the dollar for the year.

“Lack of verbal intervention so far suggests that the patience level of Japanese authorities may have gone up after the latest tweak to monetary policy and the disinflation trends in the United States,” said Charu Chanana, a market strategist at Saxo Markets.

“Still, traders are potentially cautious of that 145 handle.”

The Australian dollar slid to its lowest level since May at $0.6456 and was last down 0.30% versus the US dollar at $0.648. The currency is often seen as a proxy for investor sentiment on China.

Sterling was last down 0.34% to $1.2653, while the euro was 0.46% lower at $1.08965.